EUR/USD passes above 1.0500

Source: Dukascopy Bank SA


The publication of the Core PCE Price Index at 13:30 GMT on Thursday, has caused a decline of the US Dollar, which is boosting the financial markets and peer currencies.

The Core PCE Price Index is the main measure that the US Federal Reserve has admitted to be using to in determining its policy. The inflation index revealed that price had increased on a month-on-month basis by 0.2%. However, the market consensus was that inflation had increased by 0.3%. The surprise caused the drop of the USD, as lower inflation signals that the Fed does not need to continue its strict monetary tightening policy.

On the EUR/USD charts it has resulted in a move above 1.0500. At mid-day on Friday, the pair was fluctuating between 1.0500 and 1.0550.

An extension of the ongoing surge would have to pass the 1.0550 mark and the weekly S2 simple pivot point at 1.0580. Afterwards, the 1.0600 and 1.0650 levels might act as resistance.

However, a potential decline would look for support first in the 1.0500 level. Further below, take into account the weekly R1 simple pivot point at 1.0486 and the 50, 100 and 200-hour simple moving averages, which are spread out in the 1.0400/1.0450 range.
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