EURUSD: Technical tone is poor - BBH

Research Team at BBH, notes that the euro broke out of the narrow range that had dominated the week in response to the slightly firmer than expected US CPI, which is being driven higher by rents and medical services. 

Key Quotes 

“The technical tone is poor.  It broke the up trendline we have been monitoring (drawn off the late-July, late-August, and early-September lows), coming in a little below $1.1190 before the weekend.  The five-day moving average has slipped below the 20-day.  The RSI and MACDs have turned down. 

The 50% retracement of the advance from late July is found near $1.1160, and the euro closed below it.  The 61.8% retracement is at $1.1110.  Before the euro gets there, it has to overcome the shelf created in early-September in the $1.1120-1.1145 band. The lower Bollinger Band intersects at the lower end of that shelf.  Lastly, we note the euro nearly fell to the 200-day moving average (~$1.1145) before the weekend.  This average caught the lows in late-August and early-September.”