Euro Moves Higher as Momentum Turns Positive


EUR/USD tested the 1.1124, before recovering to near session highs at 1.1170, generating an inside day. Price action has been positive despite Eurozone GDP growth unexpectedly slowing to 0.3% quarter over quarter in Q2 from 0.4%. Eurozone July HICP was confirmed at 0.2% year over year, as expected.

The euro remains net higher on the week against most other currencies, with gains driven by diminished Grexit risk and covering of euro-funded carry positions amid China revaluation-induced market volatility. Support on the currency pair is seen near the 10-day moving average at 1.1015, while resistance is seen near the weekly highs at 1.1190.

Momentum on the currency pair has turned positive with the MACD (moving average convergence divergence) index generating a buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal.

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