Housing Starts fall sharply. CPI a touch higher than expected. EURUSD falls on weaker news.
The Housing Starts fell sharply to 529K vs expectation of a gain to 600K. Building Permits also fell sharply to 552K versus expectation of 580K. This is down from 575K last month.
The CPI rose by 0.3% and +0.2% ex food and energy. This was +0.1% more than expectations for each.
The EURUSD is testing the 200 hour MA at the 1.4939 level on the news. There should be some pause here. A modest bounce to the 1.4951 level or below, will likely lead to some further downside moves with 1.4925 (100 bar ma on the 5 minute chart the next support). 1.4914 is the 100 hour MA. This is another support level today for the pair.
On the topside. in addition to the 1.4951 level the 1.4960 level should provide resistance. A move above likely means the market ignored the fundamental data with stocks moving higher and gold continuing it’s move higher as well. The Dow Futures are currently unchanged. Gold is up $7.0. Oil is up $0.70.
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Dear Greg,
You mentioned in the 5m chart above:
“If the bounce cannot get above the 1.4951 the downside should be further explored”
Why this comment on this resistance level not on the second resistance (1.4960) or the on third resistance (1.4972) ?
is it because it is the first resistance or because it is forming like a shoulder of the H&S pattern?
I want to learn from your rich experience.
Thanks and appreciation,
Best Regards,
Ghadeer
Ghadeer,
I made the comment because the news I felt was fundamentally bearish and therefore if the bias to the downside was to remain, the price should have stayed below that level. As it turned out, the 1.4951 level tried to hold but gave way and the price trend from earlier in the day reasserted itself. This is why I chose to focus on that level at that time.
This is the If..Should Rule…If the market breaks down it should continue in that direction. If it does not, get out. I felt that if that level held the correction the downside would be ok.
I hope this helps…
Greg