The Euro did well this week versus the US Dollar, as the EURUSD pair moved above 1.1200. However, it remains below a major resistance area.
EURUSD Weekly Forecast – Euro Under Crucial Resistance
· Euro traded higher this week against the US dollar, as the Fed failed to lift the market sentiment.
· The EURUSD pair moved above 1.1200, which was a major resistance area.
· The upside move found sellers near 1.1260 and a bearish trend line on the 4-hours chart.
EURUSD Technical Analysis
The Euro bounced once again from the 1.1120 support versus the US Dollar and managed to gain strength. The EURUSD pair surged higher and during the upside move, broke the 1.1150 and 1.1200 resistance levels.
The upside stalled near the 1.1260 level, as there is a bearish trend line on the 4-hours chart, which prevented further gains. The pair was above the 100 SMA once, but now back below it.
The EURUSD pair is now below the 38.2% Fib retracement level of the last wave from the 1.1120 low to 1.1257 high. So, if there is a close below the 100 simple moving average (H4 chart), then more losses are possible in the short term. The RSI is sitting near the neutral level, and waiting for a catalyst for the next move.
Trade Idea – Selling with a close below the 100 simple moving average (H4 chart) may be considered with a stop of 20-30 pips.
This week there was no market moving event in the Euro Zone. Today, the Manufacturing Purchasing Managers Index (PMI) for the Euro Zone was released by the Markit Economics. The market was aligned for a decline from 51.7 to 51.5 in Sep 2016 (preliminary reading).
However, the report was above the forecast, as the PMI rose to 52.6. The report added that “Looking beneath the headline figure highlighted contrasting growth trends at manufacturers and service providers. Service sector business activity increased at the weakest rate since the end of 2014, whereas manufacturing production expanded at the quickest pace since December of last year”.
The Euro is facing sellers at the moment, and as long as the trend line resistance is intact, there are chances of further losses.
Trade safe traders!