The Euro managed to crawl back higher versus the US dollar, and currently EUR/USD pair is trading near a major resistance area at 1.1220-1.1250.
EUR/USD Weekly Forecast – Can Euro Bulls Overcome This?
· The Euro broke 1.1180 resistance against the US Dollar and currently trading positively.
· The EUR/USD pair is currently approaching a major resistance area at 1.1220-1.1250.
· There is a monster bearish trend line formed on the EUR/USD daily chart, which may stop the upside move.
EUR/USD Technical Analysis
The Euro recently gained traction and broke a short-term resistance area of 1.1180 versus the US Dollar. The EUR/USD pair also closed above the 100-day simple moving average, which helped the Euro bulls in gaining momentum.
However, the pair is currently approaching a major resistance area at 1.1220-1.1250. The reason why the stated levels are important is due to a monster bearish trend line formed on the EUR/USD daily chart.
The Euro bulls may struggle to clear the 1.1220-1.1250 resistance and the highlighted trend line. So, we may witness a minor downside reaction in the near term. However, the pair remains supported on the downside as well. Overall, there can be a bearish reaction, but only in the short term.
Trade Idea – Selling near the 1.1220-1.1250 resistance and the highlighted trend line with a stop of 20-30 pips in the short term may be considered.
The Euro Zone witnessed a couple of important releases this week, which helped the Euro in gaining traction. For example, the Euro Zone Services PMI figure was reported by the Markit Economics.
The market was positioned for a decline to 52.0 from 52.1 in Sep 2016. However, the Euro Zone Services PMI increased to 52.2. Commenting on the report, the Chief Business Economist at IHS Markit, Chris Williamson, mentioned “While the PMI surveys suggest the Eurozone economy continued to grow at a 0.3% rate in the third quarter, there are signs that momentum is waning. September’s expansion was the smallest since the start of last year”.
Overall, the Euro may find sellers on the upside near the highlighted resistance area, but one must not risk too much, as the trend is showing bullish signs.