EUR/USD is trading below 1.34. It finally happened after a struggle. The break awaits confirmation. The low so far is 1.3395.
The release of inflation from the German states of Saxony and Hesse could have been the last trigger for the move: the former printed an annual rate of 0.8% in July in comparison with 0.9% in June.
Also Spain’s inflation came out significantly below expectations: a drop of 0.3% in comparison to an expected rise. However, strong growth in the euro-zone’s fourth largest economy countered the drop in inflation.
Here is the chart:
Further support awaits at 1.3325, which is a long way to go. The next line is the November 2013 low of 1.3295. Most of the fall so far has been a dollar story.
For example, the surprisingly strong CB consumer confidence pushed the dollar higher. The underlying speculation is that the FOMC will shift to a more hawkish gear. We will know later on today.
For more, see the EURUSD prediction.