Key Highlights
- The Euro tested a major resistance area near 1.1740-50 against the US Dollar and declined.
- There is a major bullish trend line in place with support at 1.1620 on the 4-hours chart of EUR/USD.
- The US Gross Domestic Product for Q2 2018 (Prelim) grew 4.1%, similar to the forecast.
- Today, the Euro Zone Economic Sentiment Indicator July 2018 will be released, which is forecasted to decline from 112.3 to 112.0.
EURUSD Technical Analysis
The Euro climbed higher this past week and broke the 1.1700 resistance against the US Dollar. However, the EUR/USD pair faced a strong resistance near 1.1740-50, resulting in a downside move.
Looking at the 4-hours chart, it seems like the 1.1740-50 resistance is a crucial barrier for buyers. It acted as a resistance on many occasions and prevented an upside break towards 1.1800.
The dip was strong as the pair broke the 1.1700 support and settled below the 100 simple moving average (red, 4-hours). The pair traded as low as 1.1620 and is currently consolidating losses.
An initial resistance is near the 50% Fibonacci retracement level of the last decline from the 1.1743 high to 1.1620 low. Above this, the pair must clear the 1.1700 resistance and the 100 SMA to revisit the 1.1740 resistance.
Finally, a successful close above the 1.1740-50 resistance zone may well push the price towards 1.1800. On the downside, there a major bullish trend line in place with support at 1.1620 on the same chart. Should there be a break below this, EUR/USD could move into a bearish zone towards 1.1550.
Recently in the US, the Gross Domestic Product for Q2 2018 (Prelim) was released by the US Bureau of Economic Analysis. The market was looking for a rise of 4.1% in the GDP, more than the last +2.0%.
The actual result was similar to the forecast as the GDP grew 4.1% (according to the “advance” estimate), and the last reading was revised to 2.2%. The report added that:
The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The US Dollar is currently trading with a positive bias, but pairs like are holding key supports, which could result in an upward move.
Economic Releases to Watch Today
- US Pending Home Sales for June 2018 (YoY) – Forecast -6.0%, versus -2.2% previous.
- German Consumer Price Index for July 2018 (YoY) (Prelim) – Forecast +2.1%, versus +2.1% previous.
- German Consumer Price Index for July 2018 (MoM) (Prelim) – Forecast +0.4%, versus +0.1% previous.
- Euro Zone Consumer Confidence July 2018 – Forecast -0.6, versus -0.6 previous.
- Euro Zone Services Sentiment July 2018 – Forecast 14.9, versus 14.4 previous.
- Euro Zone Economic Sentiment Indicator July 2018 – Forecast 112.0, versus 112.3 previous.
