EUR/USD analysis: break below 1.2200 confirms double top figure

Valeria Bednarik FXStreet

EUR/USD Current price: 1.2212

Softer-than-expected local data prevented the greenback from strengthening further.
US core PCE inflation to take center stage this Thursday.

Powell-driven dollar rally continued this Wednesday, with the EUR/USD pair breaking through the 1.2200 level for the first time since mid-January. The pair traded as low as 1.2193, but softer-than-expected US data prevented the greenback from rallying sharply. The US Q4 GDP second estimated resulted at 2.3%, slightly below the 2.4% expected, while PCE inflation in the same period rose 2.7%, also well above the first estimate, but slightly below market's forecast of 2.8%. Furthermore, the Chicago PMI for February missed expectations, printing 61.9 while Pending Home Sales fell by 4.7% in January, well below an expected 0.3% advance. Undermining the common currency was EU preliminary February inflation, that rose less than expected according to preliminary estimates, with the core yearly reading up 1.0%, below the forecasted 1.1%.

Thursday will bring the final revisions of Markit PMIs for the EU and the US alongside with official figures for this last, although the more relevant reading will be US January PCE inflation, Fed's favorite inflation measure. The yearly number is expected at 1.5%, while inflation is expected to come flat monthly basis, which may cool down expectations of a faster pace in rate hikes this year.

Technically, the pair is bearish and hovering around the neckline of a double-top figure of around 350 pips' height, not yet confirming it, but about to, which will theoretically implicate a decline of a similar extent. Short-term, and according to the 4 hours chart, the risk leans toward the downside, given that in the 4 hours chart, the pair is developing well below a bearish 20 SMA, which accelerates below the larger ones, while technical indicators pared their declines near oversold readings, rather reflecting the latest bounce than suggesting downward exhaustion.

Support levels: 1.2200 1.2165 1.2130

Resistance levels: 1.2240 1.2275 1.2310

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD softens to near 1.3600 as BoE hints further rate cuts

The GBP/USD pair loses ground to near 1.3610 during the early Asian session on Monday. The Pound Sterling softens against the Greenback amid growing expectations of the Bank of England’s interest-rate cut. Traders will take more cues from the Fedspeak later on Monday.

Gold eyes acceptance above $5,000, kicking off a big week

Gold is consolidating the latest uptick at around the $5,000 mark, with buyers gathering pace for a sustained uptrend as a critical week kicks off. All eyes remain on the delayed Nonfarm Payrolls and Consumer Price Index data from the United States due on Wednesday and Friday, respectively.

Top Crypto Gainers: Aster, Decred, and Kaspa rise as selling pressure wanes

Altcoins such as Aster, Decred, and Kaspa are leading the broader cryptocurrency market recovery over the last 24 hours, as Bitcoin holds above $70,000 on Monday, up from the $60,000 dip on Thursday.

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.