Euro fell against the U.S. dollar after data released yesterday showed German inflation dropped, putting the European Central Bank under high pressure to engage in monetary policy easing anytime soon. The single currency remains under selling pressure ahead of eurozone CPI report.
EUR/USD prices dropped after the pullback faced a resistance from the lower line of the bearish Flag. Prices closed below the daily SMA (20) reinforcing the bearish settings to short the pair. This settings offer good opportunity to “Short” the pair using a stop loss order just above the lower line of the flag and take profit zone around $1.2170 as the flag potential target. Due to divergence between central banks, any rally of the pair would represent good opportunities to enter sell positions.