- Euro surged higher against the US Dollar, and it looks set for more upsides in the near term.
- There is a bullish trend line formed on the hourly chart of EURUSD, which is acting as a bullish bias catalyst.
- Euro Area Producer Price Index (PPI) released by the Eurostat posted an increase of 0.3% in March 2016, more than the forecast of 0.1%.
- In terms of the yearly change, there was a decline of 4.2% in March 2016, less than the forecast.
The Euro gained a lot of traction recently and blasted higher vs the US Dollar. The EURUSD pair traded as high as 1.1615 where it found sellers. The pair is currently correcting lower, and may find buyers near a bullish trend line formed on the hourly chart.
The highlighted trend line and support area is coinciding with the 38.2% Fibonacci retracement of the last leg from the 1.1468 low to 1.1615 high, so it may act as a barrier for more losses.
Buying dips may be considered as long as the pair is above the highlighted trend line and support area.
Euro Area Producer Price Index (PPI)
Today, the Euro Area Producer Price Index (PPI), which is an index that measures the change in prices received by domestic producers of commodities was released by the Eurostat. The forecast was slated for a rise of 0.1% in the PPI in March 2016. However, the outcome was better, as the Euro Area PPI rose 0.4%.
Moreover, the yearly change posted a decline of 4.2% in March 2016, less than the forecast. The report added that “The 0.3% increase in industrial producer prices in total industry in the euro area in March 2016, compared with February 2016, is due to rises of 1.2% in the energy sector and of 0.2% for durable consumer goods“.
The Euro may correct a few pips from the current levels, but it is most likely to find buyers on the downside vs the US Dollar.