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EURUSD : EUR Weakens Against Dollar after Strong PPI Data

EUR came back from the three week high level after the Department of Labor in US released the Producer Price Index data which is a leading indicator of consumer inflation.

 According to the data the Producer Price Index for final demand increased by .5% in March on a seasonally adjusted basis beating the economists expectation for an increase of .1%. The increase in final demand prices can be traced down to the index for final demand services which rose .7% whereas prices for final demand goods were unchanged.

 On YOY basis the producer prices in US increased 1.4% in March 2014 over the same month in the previous year.

On the 4 hour chart, EUR weakened against US dollar after the release of the data. However as the pair was trading within an upward sloping channel it found support from the support trend line. The pair might again move up towards the resistance trend line however on the stochastic oscillator it is in the overbought zone since a long time so a breakout from the support trend line could be expected.