The Euro has been flying high on the recent weakness in the USD, and the dovish comments from the chair of the FED Janet Yellen have so far driven down the value of the USD further as the FED stresses over inflation. This is likely to continue in the near term and the recent comments from the FED early this morning have so far kept the same dovish tone, which means we could be in for more of the same over the next few months and markets have taken notice. In Germany however we have seen some very positive signs with the recent preliminary CPI m/m reading coming in at 0.8% which is a very strong reading, and a reading this strong has not been seen since Feb 2015. Markets have viewed this reading so far as quite positive and the EURUSD has climbed higher as a result.

EURUSD bulls have been so far looking to move up the charts and they have done so with varying degrees of success as support around the 1.0831 level has managed to stem back bearish movements in previous months. The push higher today has so far managed to avoid resistance at 1.1376 and has pulled back to stop at the lower level of resistance at 1.1321. With the recent movement higher I am looking for another push through the upper level of resistance of 1.1376 and onto the next level target of 1.1574 and with the positive outlook from inflation data it could very much be on the cards in the near future.

Canadian bulls are running rampant today as they have caught the recent jump in oil prices as the crude oil inventory reading came in positive at 2.30M barrels, now this was a positive sign for bulls as the market had priced in 3.20M so the jump lower for the USDCAD was no surprise, but it certainly found heavy resistance in the market for further drops. This resistance I talked about yesterday stems from the fact that people are still very much worried about the possibility of the Canadian economy holding up against the US economy as it has struggled as of late. Either way the recent drop puts a new perspective on things, and I would expect traders will be looking to play this volatility while it lasts.

Technical movements on the charts have been very active since the crude oil inventory release and the support level at 1.2899 was tested during the strong movements earlier. From here on down the next major level of support can be found at 1.2685 and I would anticipate we would need more weakness in the USD for this move to happen - something that the market is now eagerly expecting as the dovish tone of the FED continues to echo across the markets. Any pull back up the charts will most likely struggle if it touches the 20 day moving average which is acting as dynamic resistance I would expect markets to treat this level with respect as it has so far been quite strong. 

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