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EURUSD: Continues downside momentum after strong U.S data

The second day of testimonials with U.S Federal Reserve Chair Janet Yellen answering questions from members of Congress ended with confidence that inflation will move back toward the Fed’s 2% objective and reassuring investors that an interest rate hike is not imminent. Positive U.S core CPI and Durable Goods lifted the USD-index to trade at its highest levels of the week.

On today economic calendar we have the preliminary consumer price index (CPI) in February from Germany that is expected to rise from -0.4% to -0.2% signaling that prices are rising and inflation is still alive. On the other side of the Atlantic we will have from the U.S the preliminary gross domestic product annualized in the fourth quarter that is estimated to fall from 2.6% to 2.1%.

EURUSD plunged during yesterday session breaking below the consolidation channel at 1.1270 and closed near the low of the day. The pair is still in a bearish phase and is trading below the 10-day moving average. The stochastic is showing a strong bearish momentum.

Expecting downward move to a daily support at 1.1097 on a break below previous day low at 1.1183 (scenario 1).