The U.S. July CPI (Consumer Price Index) came in lower than expected yesterday, which pushed the euro up from around 1.1600 to 1.1697. However, it failed to reach the August 7 high of 1.1699 and then lost strength. This has formed a short-term “double top” pattern.
The 1.1590 level is important because it is the “neckline” of this pattern and also matches the 38.2% Fibonacci retracement, making it a strong support level.
If the price clearly falls below 1.1590, there is no major support until around 1.1400. On the other hand, if it holds above 1.1590, the euro/dollar is likely to trade in a narrow range between 1.17 and 1.16 for the time being.
Expected Euro/Dollar Range: 1.1590 (38.2%) – 1.1700
Note: This information does not guarantee profits. Please make your own decisions when trading.