EURUSD Weekly Analysis – Euro Testing Crucial Support
· The Euro after trading as high as 1.0651 against the US Dollar failed, and moved down.
· A major broken resistance area at 1.0480 on the 4-hours chart of EURUSD is currently acting as a support.
· The German Manufacturing Purchasing Managers Index (PMI) released by the Markit economics posted a rise from the last reading of 55.5 to 55.6 in Dec 2016.
EURUSD Technical Analysis
There was a nice upside move in the Euro this past week against the US Dollar, as it moved above the 1.0600 handle. However, the upside move found sellers near 1.0650, and the EURUSD pair started moving down.
During the downside move the pair broke the 50% Fib retracement level of the last wave from the 1.0371 low to 1.0651 high. It is a bearish sign and calling for more declines. However, there is a major support at 1.0480, which is currently preventing declines.
The stated support holds a lot of importance, as 1.0480 was a resistance earlier, and now acting as a support. Moreover, the 100 simple moving average on the same chart is aligned with the 61.8% Fib retracement level of the last wave from the 1.0371 low to 1.0651 high.
Trade Idea – If you are looking to enter a buy trade, then consider it near the 1.0480-60 levels with a stop of around 20-25 pips.
Today in the Euro Zone, the German Manufacturing Purchasing Managers Index (PMI) for December 2016 was released by the Markit economics. The market was expecting no change from the last reading of 55.5.
The result was positive, as there was a rise to 55.6. The report that the “the performance of the manufacturing economy rose from 54.3 in November to a 35-month high of 55.6. With solid growth also signalled in October, December’s reading meant that the fourth quarter average (55.0) was the highest in nearly three years“.
Overall, there is a chance of a bounce in EURUSD as long as the pair stays above the all-important 1.0480-60 support area.