The Euro traded lower towards 1.0350 against the US Dollar. Later, EURUSD started a recovery and currently facing a major resistance near 1.0420.
EURUSD Weekly Analysis – Can Euro Continue To Recover?
· The Euro traded to a new multi-year low at 1.0353 against the US dollar this week.
· Later, the EURUSD pair started a recovery, and broke a bearish trend line on the hourly chart at 1.0390.
· Today in the Euro Zone, the French Producer Price Index released by INSEE posted a rise of 0.8% in Nov 2016.
EURUSD Technical Analysis
The Euro felt a lot of heat lately as it dived against the US Dollar to a new multi-year low at 1.0353. The EURUSD pair somehow managed to gain traction, and started recovering. During the recent upside, it broke a bearish trend line on the hourly chart at 1.0390.
However, the upside move is facing a monster resistance near 1.0420. The stated level represents the 23.6% Fib retracement level of the last decline from the 1.0669 high to 1.0353 low.
Moreover, a bearish trend line and the 100 hourly simple moving average is also near 1.0420. So, we can say that there is a monster resistance formed near 1.0420, which may act as a pivot area. The hourly RSI is currently above the 50 level, which is a positive sign for EURUSD.
Trade Idea – If you are looking to enter a buy trade, then consider it with a break above the highlighted trend line and the 1.0420 resistance with a stop of around 20 pips.
Today in the Euro Zone, there was no major economic release. In a low risk event, the French Producer Price Index was released by INSEE. The market was not expecting any major change in prices in primary French markets by producers of commodities in all states of processing.
The result neutral, as there was a rise of 0.8% in Nov 2016, compared with the previous month. It was also similar to the last reading in the previous month.
The Euro is currently trading higher, and if there is a break above the trend line resistance at 1.0420, then there can be more gains in the short term in EURUSD.