EUR/USD Weekly Forecast – Euro Set To Decline Further (13th October 2016)

The Euro recently broke a major support area at 1.1080 versus the US Dollar, which has set the path for more declines in the EUR/USD pair.

EUR/USD Weekly Forecast – Euro Set To Decline Further

·       The Euro started a downtrend against the US Dollar after failing to break the 1.1200 resistance.

·       There was a triangle pattern formed on the 4-hours chart of EUR/USD, which was broken to set a decline towards 1.1000.

·       Any correction from the current levels towards 1.1080 may find sellers.

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EUR/USD Technical Analysis

The Euro felt the heat and faced sellers near 1.1200 against the US Dollar, and started trading lower. The stated level was a monster resistance, as it was aligned with the 100 simple moving average, and the 200 SMA (H4 chart).

There was a triangle pattern formed on the 4-hours chart of EUR/USD, which was broken along with a major support area at 1.1080. The pair traded as low as 1.1008, and currently correcting higher.

EURUSD Euro Dollar Chart 13oct16

The current correction phase may not last long, as the 23.6% Fib retracement level of the last drop from the 1.1204 high to 1.1008 low might act as a resistance along with the broken triangle lower trend line.

Trade Idea – If you are looking to enter a sell trade, then consider it near the stated fib level and the broken triangle lower trend line with a stop of around 25 pips.

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Fundamental Analysis

The Euro zone witness a couple of economic releases, but not was affective. The Euro Area Industrial Production report was released by the Eurostat today. The market was expecting a 1.1% rise in August 2016, compared with the previous month.

However, the result was positive with a rise of 1.6%. The report mentioned that the “increase of 1.6% in industrial production in the euro area in August 2016, compared with July 2016, is due to production of durable consumer goods rising by 4.3%, capital goods by 3.5% and energy by 3.3%”.

Overall, the report was positive, and may push EUR/USD towards 1.1080, which may now act as a hurdle. It looks like the Euro may remain in a downtrend as long as it is below 1.1200.

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