EUR/USD still capped by 1.3200

By FXstreet.com | August 29, 2014 AAA

FXStreet (Edinburgh) - The single currency is trading almost unchanged at the end of the week, with the EUR/USD now hovering over 1.3185/90.

EUR/USD bounced off 1.3160

Spot well managed to leave behind overnight session troughs in the area of 1.3160 and escalate beyond the 1.3200 handle in the wake of the key EMU’s inflation figures for the month of August. Recall that headline consumer prices rose at an annual pace of 0.3% and Core prices advanced 0.9%, surpassing estimates at 0.8%. In light of the recent euro releases, Senior Analyst Flemming Nielsen at Danske Bank noted, “We are in line with consensus at 0.3% y/y but this will not be enough to trigger an ECB interest rate cut at next week’s meeting. We expect any near-term bounce in EUR/USD to be short-lived and we expect the downtrend to continue in coming months”.

EUR/USD levels to watch

The pair is now up 0.05% at 1.3188 with the next resistance at 1.3222 (high Aug.28) ahead of 1.3297 (high Aug.22) and then 1.3316 (210-d MA). On the downside, a breach of 1.3152 (low Aug.27) would target 1.3105 (low Sep.6 2013) en route to 1.3089 (low Jul.19 2013).

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