The Euro is trading higher on Friday as investors digest today’s U.S. inflation report, released at 12:30 GMT. So far traders have showed a muted response to the news that a key inflation indicator that the Federal Reserve uses to set policy rose 3.4% in May, the fastest increase since the early 1990’s.
The core index rose 0.5% for the month, which actually was below the 0.6% estimate. Including volatile food and energy prices, the PCE Index rose 3.9% for the year and 0.4% for the month.
At 12:47 GMT, the EUR/USD is trading 1.1955, up 0.0024 or +0.20%.
In other news, Personal Income came in at -2.0%. This was better than the -2.5% estimate and the -13.1% previous reading. Personal Spending was unchanged, but below the 0.4% forecast. The previous month was revised higher to 0.9%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1848 will signal a resumption of the downtrend. The main trend will change to up on a move through 1.2218.
The main range is 1.1704 to 1.2266. The EUR/USD is currently trading inside its retracement zone at 1.1985 to 1.1919. This zone is controlling the near-term direction of the Forex pair.
The longer-term pivot at 1.2027 is potential resistance.
The short-term range is 1.2266 to 1.1848. Its retracement zone at 1.2057 to 1.2106 is the primary upside target.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD the rest of the session on Friday is likely to be determined by trader reaction to 1.1941.
A sustained move over 1.1941 will indicate the presence of buyers. The first upside target is 1.1970, followed by 1.1985. The latter is a potential trigger point for an acceleration to the upside with 1.2027 the next likely target.
A sustained move under 1.1941 will signal the presence of sellers. The first two downside targets are 1.1919 and 1.1909. The latter is a potential trigger point for an acceleration to the downside with 1.1848 the next likely downside target.
Due to the series of retracement levels from 1.1985 to 1.2106, any rally is likely to be a labored event.