Chart: WorldWideMarkets Alpha Trader
10-minute Chart Study
The European session has been once again confined to a narrow trading range. H 1.3660 L 1.3640 (+20 pips). The channel on the chart shows what may seem to be a rising channel with a the bottoms however, are becoming more narrow which denotes less volatility in the market, as obviously seen in the prior Asian session.
The 1.3660 level appears to be toppish and this move up may perhaps be unsustainable with no follow through buying action, as the New York session enters. A correction on the intraday chart may occur to the 1.3640, 1.3635 level if the market continues to display less momentum.
The Fibonacci Fan had shown an illustration of the rebound of the euro to 1.3660 shows a support at 1.3640 which may be reached in the daily short term run.
The Eurozone Flash June HICP stayed at 0.5% y/y compared to +0.5% last month. The increase in German inflation last week gave the market an upward surprise, but disinflation outside of Germany is still an ongoing concern. Italy’s HICP was +0.2%, below the +0.4% est. Spain’s HICP +0.0% vs. +0.2% in May. The ECB may perhaps be waiting to see the further stages of development of EU inflation, and a few analysts say that they should refrain from any radical approach such as quantitative easing.