EURUSD Breakout and Correction (July 14, 2017)

Price is retesting the broken triangle resistance which might now hold as support. 

Applying the Fib tool on the latest swing low and high shows that the 61.8% level lines up with the broken triangle resistance and is also close to the 1.1400 major psychological support. If this area continues to keep losses in check, the pair could climb back to the swing high or higher. 

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. Stochastic is also heading higher to indicate that bullish momentum is in play. A break below the 61.8% Fib, however, could signal that bears are putting up a fight. 

Economic reports from the euro zone came in line with expectations. The German final CPI reading was unchanged at 0.2% while the French final CPI was also maintained at a flat reading. Italy's trade balance and the region's trade balance are up for release today. 

Meanwhile, the dollar had a mixed forex performance as Fed head Yellen shared a relatively balanced view of the economy and its risks. She did reiterate that they could start balance sheet unwinding later this year but warned that they'll be watching the impact on the yield curve to gauge if future rate changes are still necessary.

US PPI figures came in mixed and the CPI readings are due today. Fed policymakers have been emphasizing how inflation trends will influence their rate hike decisions so stronger than expected results could mean more upside for the US currency. US retail sales are also due, and both headline and core readings could show rebounds. 

By Kate Curtis from Trader's Way