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Alert - 14:00 (CET) - Dollar advances against the Euro
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The evolution of the prices in the Eurozone gave a renewed thrust to the market. The Consumer Price Index came at 2.1% anualized from 3.6% in June, very near the 2% target of the ECB.
This steep decline of the inflactionary risks, only confirms that the BCE could make significant rate cuts next week, and the traders are already pricing that in.
This way, the single currency fell 220 pips from its intraday high at 1.2957 at 08:15 (CET).
The EurUsd trading at 1.2719, under yesterday's close at 1.2904. Checking the hourly graphics, the 20- and 50-day Exponential Mobile Averages (EMA) are over the 200-day EMA.
The traders are watching the supports at 1.2500, 1.2324 (January 2006 high) and 1.2000 (key). As the resistance at 1.2733 (October 23rd high) was broken, the traders are challenging the next at 1.3000 (key). If broken, they'll target the next at 1.3353 (October 21st high).
Meanwhile, the 60-minute Relative Strenght Index (RSI) is at 21 points, in the oversold area. The average volatility per hour is 180 pips. Checking the daily graphics, we see that the current price is under the 38.20% (1.3063) and over the 50.00% (1.2141) Fibonacci retracement lines.
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