Chart of the Day for October 5th looks at the EURUSD as it stands at the close of play on Friday evening.

In recent months we have broken through several key support areas and on Friday we made a new low for the current bear swing.

For a full explanation of the technical picture watch the video below or a higher resolution version here. N.B. The video also includes an explanation and examples of an advanced stochastic breakout trade.

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The US Producer Price Index (PPI) came in worse than expected for the month of August, the Bureau of Labor Statistics reported today.

The PPI for Finished Goods came in at -0.9% MoM compared to the -0.5% that had been expected. This seasonally adjusted figure compares to the 1.2% and 1.8% increases seen in July and June respectively. Today’s number represents the first downturn in wholesale inflation since December 2007.

Looking at the year-over-year numbers we can see that inflation has risen by 9.6%, 2 ticks lower than the 9.8% YoY growth reported for July.

The main contributing factor to August’s number was the sharp fall in energy prices. Month-over-month energy prices were down by 4.6% compared to an increase of 3.1% in the previous month. Food prices remained firm posting a 0.3% increase for the second month in a row.

The Core PPI, which strips out the volatile Energy and Food components, came out in line with expectations 0.2%. This means that the unadjusted yearly rate of 3.6% remains at the highest level seen since May 1991. 

Elsewhere the lesser important Intermediate Goods posted -1.0% growth for July and Crude Goods a much larger -11.9%.

Today’s data left the US Dollar slightly lower across the board. At the time of writing the EURUSD is at 1.4222 compared to the 1.4000 it had been at 24 hours earlier. GBPUSD was up to 1.7943 from 1.7577. It should be noted however that Retail Sales data contributed to these price moves also.