The Euro (EUR) inched higher against the US Dollar (USD) on Monday, after plunging to 14-year low last week as Fed increased its interest rate and hinted at least 3 more raises in cash rate next year. The technical bias remains bearish because of a lower low and lower high in the recent wave.
As of this writing, the pair is being traded near 1.0459. A hurdle can be seen around 1.0515, the short term horizontal resistance area ahead of 1.0685, another key horizontal resistance level and then 1.0905, a huge resistance zone. The technical bias shall remain bearish as long as the 1.1300 resistance area is intact.
On the downside, the pair is likely to find a support near 1.0362, a short term support level ahead of 1.0300, the psychological number as demonstrated in the given above daily chart. A break and daily closing below the 1.0300 support shall incite renewed selling pressure, validating a move towards 1.0000 which is the parity level.
The final Eurozone November CPI reading was in line with the flash reading as the annual rate increased to 0.6% from 0.5% in October despite a 0.1% monthly decline in prices. The headline rate increased from 0.1% in November 2015 and was the highest reading since April 2014. The core rate was unchanged from October at 0.8% and declined slightly from the 0.9% rate seen in November 2015. Energy prices fell 0.2% on the month with an annual decline of 1.1% and compared with a 7.3% decline in the year to November.
Considering the overall technical and fundamental outlook, selling the pair on rallies appears to be a good strategy in short to medium term.