Key Highlights
- The Euro recovered recently and traded above the 1.1350 resistance against the US Dollar.
- There is a major bullish trend line formed with support at 1.1350 on the 4-hours chart of EUR/USD.
- The Chinese CPI in Nov 2018 increased 2.2% (YoY), less than the forecast of 2.4%.
- Today, the German Trade Balance for Oct 2018 will be released, which is forecasted to post a surplus of €17.7B.
EURUSD Technical Analysis
After a sharp downside move, the Euro found support near 1.1250-60 against the US Dollar. The EUR/USD pair recovered and traded above the 1.1300 and 1.1350 resistances.
Looking at the 4-hours chart, the pair corrected above the key 1.1370 resistance as well, opening the doors for a decent rebound. Buyers even pushed the pair above the 50% Fib retracement level of the last decline from the 1.1472 high to 1.1267 low.
Besides, there was a close above the 1.1350 level, the 200 simple moving average (green, 4-hours), and the 100 simple moving average (red, 4-hours).
On the upside, the pair is facing resistance near the 1.1420-30 zone. A close above 1.1430 could clear the path for more gains towards the 1.1470 and 1.1500 resistance levels.
On the downside, an initial support is near 1.1370 and the 100 SMA. Besides, there is a major bullish trend line formed with support at 1.1350 on the same chart. If there is a close below the trend line and 1.1330, the pair may decline once again towards the 1.1260 level.
Fundamentally, the Chinese CPI for Nov 2018 was released by the National Bureau of Statistics of China. The market was looking for a 2.4% rise in the Chinese CPI compared with the same month a year ago.
However, the result was disappointing as the CPI increased 2.2%. The monthly change was also disappointing as there was a decline of 0.3% in the CPI.
The outcome may impact the risk sentiment in the short term, but it seems like pairs such as EUR/USD and GBP/USD are likely to rebound further in the near term.
Economic Releases to Watch Today
- Germany’s Trade Balance for Oct 2018 – Forecast €17.7B, versus €17.6B previous.
- Germany’s Imports of goods and services Oct 2018 – Forecast +0.4%, versus -0.4% previous.
- Germany’s Exports of goods and services Oct 2018 – Forecast +0.5%, versus -0.8% previous.
- UK Industrial Production for Oct 2018 (MoM) – Forecast +0.1%, versus 0% previous.
- UK Manufacturing Production for Oct 2018 (MoM) – Forecast 0%, versus +0.2% previous.
- UK GDP for Oct 2018 (MoM) – Forecast +0.1% versus 0% previous.
