The CAC 40 and EUR/USD are rebounding this morning, paring losses from earlier this week. This bounce in European markets has come despite Euro-Zone CPI being reported under expectations for the month of May. EUR-Zone CPI (YoY) (May) was expected at 1.5%, but released at an actual 1.4%. With little European news left on the calendar, traders will next be looking to Friday’s U.S. Change in Non-Farm Payrolls (May) to provide direction. Expectations for Friday’s Non-farm Payrolls (May) are currently set at 180k.
Technically, the CAC 40 is rebounding from this week’s standing lower at 5,270.70. Despite this rebound in price intraday, traders should note that the Index remains beneath its 10 day EMA (exponential moving average) found at 5,328.57.If a new bullish trend is to begin, traders should watch for the CAC 40 to not only trade, but close above this value. This would then technically expose last week’s high of 5,375.50. If the CAC 40 remains under its 10 day EMA however, traders may look for bearish momentum to take the Index back towards the standing monthly low at 5,238.40.
CAC 40, Daily Chart with 10 day EMA
The EUR/USD has now risen as much as 119 pips from yesterday’s low of 1.1109.Unlike the CAC 40, the EUR/USD has already broken out above its 10 day EMA which is found at 1.1171. With prices trading higher, traders may next look for the pair to challenge the standing 2017 high at 1.1268. If the EUR/USD is rejected below the yearly high, traders may look for the pair to trade back below its 10 day EMA. In a bearish scenario traders may look for the EUR/USD to then trade to new weekly lows under 1.1109, then potentially push to new monthly lows under 1.0839.
EUR/USD, Daily Chart with 10 day EMA
— Written by Walker, Analyst for DailyFX.com
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