EUR/USD comes down to test 1.1600 on German CPI
- German inflation figures surprised to the downside.
- Spot left the area of daily highs near 1.1650 to test 1.1600.
- USD picks up following US data.
The shared currency is extending its correction lower on Monday, now sending EUR/USD to test the 1.1600 neighbourhood after climbing as high as the boundaries of 1.1650 during early trade.
EUR/USD softer on data
The European currency came under renewed selling pressure after advanced German inflation figures showed consumer prices gauged by the CPI are expected to rise at an annualized 1.6% in September and to come in flat on a monthly basis.
Furthermore, gauged by the broader HICP, prices are seen up 1.5% over the last twelve months and contracting 0.1% inter-month.
Earlier in the session, EMU’s economic sentiment came in on the strong side at 114 for the current month, while business climate also bettered initial estimates at 1.44.
On the USD-side, the US Dollar Index has managed to rebound from lows after positive prints from September’s PCE and personal income/spending, adding to the pair’s downside.
In the meantime, Friday’s breakdown of the H&S neckline around 1.1660 continues to weigh on EUR sentiment, adding to the downbeat mood surrounding EUR in the wake of the ‘dovish tapering’ by the ECB on Thursday.
EUR/USD levels to watch
At the moment, the pair is up 0.01% at 1.1609 facing the next up barrier at 1.1642 (high Oct.30) seconded by 1.1683 (100-day sma) and finally 1.1739 (10-day sma). On the flip side, a breakdown of 1.1575 (low Oct.27) would open the door to 1.1448 (high Jun.30) and finally 1.1249 (200-day sma).