EURUSD Resilient Ahead of Inflation Print, NATO Meeting

EUR/USD News and Analysis

• EURUSD is resilient after a missile lands in Poland. Emergency NATO meeting scheduled for 09:00 GMT
• The EUR/USD has a significant resistance zone ahead of the October EU inflation data.
• This article uses chart patterns Key Resistance and support levels. For more information visit our comprehensive education library

EUR/USD Resilient After Missile Lands In Poland, Emergency NATO Meeting Set for 09:00 GMT

EUR/USD has shown great resilience to trade higher this morning despite yesterday’s unease following reports of a missile landing in Poland. Joe Biden’s comments suggest that Russia is unlikely to have launched the missile based on its trajectory. Europe, NATO, and financial markets are on alert because of the possibility of a larger conflict now that an NATO ally has been negatively affected by the Russia/Ukraine conflict.

NATO has scheduled an emergency meeting for 09:00 GMT to discuss the events of yesterday and the alliance’s response.

Technical Considerations EUR/USD

The daily chart shows how EUR/USD retraced over 100 pips from yesterday’s high, settling around the 2017 low of 1.0340. The EUR/USD has attempted to trade above the 1.0450 level, which is the upper bound for the significant zone resistance. The zone is quite large, but the weekly chart below shows the price action around the 1.0310-1.0450 zones previously.

Resistance remains at 1.0450, followed by resistance at 1.0620. This is where price action hovered at times in May and June of this year. Support is at 1.0340, followed by 1.0280.

Daily Chart EUR/USD

Source: TradingView. Prepared by Richard Snow

The weekly chart shows the resistance zone in blue, and the inflection points highlighted in yellow. A EUR/USD advance above this zone and continued momentum are positive signs for a possible continuation of the euro bullish trend.

Weekly Chart EUR/USD

Source: TradingView. Prepared by Richard Snow

The Week ahead: Risk Events

Today sees US retail sales forecast to rise 1% month on month after last months flat print, followed by a number of Fed speakers: Williams, Barr and Waller who are likely to reiterate that inflation is too high, at some point rate hikes will slow and that there is more to be done until inflation prints reveal “compelling evidence” of cooling towards the 2% target.

Sticking with the theme of central banks, ECB President Christine Lagarde is due to speak at 15:00 GMT today with the ECB’s Visco and Elderson getting things started at 10:00 GMT. The rest of the week welcomes the final EU inflation print with the headline reading forecast to reach 10.7%, not far from the UK’s 11.1% print earlier this morning. Markets will be watching for confirmation that the Fed has taken a more dovish tone, which, along with positive US CPI data, has led to a much softer currency.

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— Written by Richard Snow, DailyFX.com

Follow Richard on Twitter and contact him: @RichardSnowFX