EUR/USD has extended its losses after the one-two punch yesterday from Nowotny and US data. A Head & Shoulders pattern can now be seen.
With euro-zone data failing to excite, the focus now turns to important US data, that could determine a break or bounce of the shoulder line.
Earlier in the week, EUR/USD rose very nicely and made a nice break above 1.1460 – a critical resistance line that capped the pair in May and in September.
However, after failing to touch 1.15, the ECB came out with readiness to do more. This sent the pair down below 1.1460. A small beat in US inflation numbers, with core CPI at 1.9% y/y already sent the pair below 1.14. And now we are seeing an extension of this fall.
The neckline is 1.1340. A loss of this level opens the door to 1.1290. The next support line is 1.1215. 1.14 serves as the top of the shoulder line, where the neck begins, and 1.1460 is still relevant on the upside.
US industrial output at 13:15 GMT is expected to to side by 0.2% and it serves as a warm up towards the bigger event: the University of Michigan’s consumer sentiment, which is expected to tick higher.
See how to trade the consumer sentiment with EUR/USD.
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