Euro Halts Bullish Rally as Traders Eye $1.1850 Resistance

• Euro Halts Bullish Rally as Traders Eye $1.1850 Resistance

The euro plunged for the first time this week against the US dollar as traders refrained from adding fresh long positions ahead of $1.1850 resistance.

The Euro-single currency declined slightly after data showed the Euro-area economy expanded by 0.6 percent in the second quarter. Up from 0.5 percent recorded in the first three months of the year.

Foreign exchange traders believed a sustained break of $1.1850 is necessary to validate bullish continuation, especially with yesterday data showing euro-area consumer prices remain below central bank’s 2 percent target.

The consumer price index which measures inflation showed the euro-area inflation rose 1.3 percent year-on-year. Suggesting the European Central Bank may not be unwinding its balance sheet or even raise rates soon.

Real-money accounts have started taking profit on their long positions after buying non-stop in the past weeks, said a trader at a hedge fund in the Middle East, who asked not to be mentioned.

The Euro has gained about 12 percent against the US dollar this year.