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EURUSD : Might Break Below the Rising Channel

EURUSD : 4 Hour Chart

EURUSD has now started following a rising channel trend on the 4 hour chart (and also on the daily chart) showing a rebound in the pair on the daily chart. However it may decline below the support trend line of the channel as a data showed that the German economic sentiment weakened to the lowest level since December 2012 this month and euro zone economic sentiment also declined. Euro zone industrial production data also missed the economist’s expectations which will continue to weigh on the pair.

Official data showed that the index for euro zone economic sentiment declined to 4.1 in September from 14.2 in August below the economist’s expectation for a decline of 7.1. The German economic sentiment fell by 10.5 points to -3.6 this month from the September reading of 6.9 which economists were expecting to decline by 5.9 points to 1. A separate report showed that the industrial production declined by 1.9% in August from a year earlier compared to the expectations for a decline of .9%.

The series of weak data will continue to weigh on the pair and might push the pair to decline below the rising support trend line. On the other hand the demand for US dollar remain supported because of the concern over global economic growth after IMF forecast.