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EUR/USD: end of short squeeze – FXStreet

FXStreet (Barcelona) - The EUR/USD short squeeze might end if the Eurozone CPI data disappoints expectations, notes FXStreet Editor and Analyst, Omkar Godbole.

Key Quotes

“The pair rose to an intraday high of 1.0816 on Thursday as the shorts continued to get squeezed, partly aided by a weaker US economic data. The move was largely a technical driven, since the German benchmark 10-year yield hit new record low of 0.085%, while its US counterpart stayed more or less steady around 1.9%.”

“However, the short squeeze could end ahead of the weekend if the Eurozone CPI figures disappoint expectations. Year-on-year the CPI in March is expected to remain unchanged at -0.1%, while month-on-month the CPI is expected to rebound to 1.15 from 0.6% in the previous month.”

“An uptick in the inflation could see the pair re-test its 50-DMA at 1.0887. However, a weaker-than-expected data is likely to stall the rally around 1.07 levels.”

“On the charts, we see the pair closed the previous session above the double top neckline at 1.0711. Still, the daily RSI is bearish indicating possibility of a correction today.”

“On the 4-hourly chart, the 200-MA currently located at 1.0777 has acted as a strong resistance. The pair has failed to sustain gains above the same since the North American session yesterday. Thus, a 4-hour closing above the same could open doors for 50-DMA at 1.0887.”

“On the other hand, a break below 1.0756 could drive the pair lower to 1.0711 levels. The immediate losses appear capped around 1.07-1.0711 levels.”

“The Greek uncertainty is still on the table and fresh news regarding the same could weigh over the pair.”

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