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.
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.
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.
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.