Key Highlights
- The Euro started a solid rebound and traded above 1.1300 against the US Dollar.
- EUR/USD broke two bearish trend lines near 1.1280 on the 4-hours chart.
- The US Industrial Production increased 0.1% in Feb 2019 (MoM), less than the +0.4% forecast.
- The Euro Zone Trade Balance for Jan 2019 will be released today, which could post a surplus of €13.2B, down from €15.6B.
EURUSD Technical Analysis
After a major decline, the Euro found support near the 1.1175 level against the US Dollar. Later, the EUR/USD pair recovered nicely and moved above the 1.1250 and 1.1300 resistance levels.
Looking at the 4-hours chart, the pair popped higher above the 1.1280 pivot level and even cleared the 50% Fib retracement level of the last decline from the 1.1419 high to 1.1175 low.
More importantly, the pair broke two bearish trend lines near 1.1280 on the same chart. Finally, there were a couple of spikes above the 1.1340 level and the 61.8% Fib retracement level of the last decline from the 1.1419 high to 1.1175 low.
However, the pair struggled to clear the 200 simple moving average (green, 4-hours) and started consolidating gains. On the downside, an initial support is near the 1.1280 area (the previous resistance). If there are more losses, the pair may revisit the 1.1250 support level.
On the upside, a proper close above the 1.1350 level and the 200 SMA could open the doors for an extended rebound towards 1.1400 and 1.1420. Conversely, if buyers fail to keep the pair above 1.1280 or 1.1250, the Euro is likely to move back in a bearish zone.
Fundamentally, the US Industrial Production report for Feb 2019 was released this past Friday by the Board of Governors of the Federal Reserve. The market was looking for a 0.4% rise in the production in Feb 2019, compared with the previous month (MoM).
The result was lower than the forecast, as the US Industrial Production increased 0.1%. On the positive note, the last reading was revised up from -0.6% to -0.4%.
The report added that:
Manufacturing production fell 0.4 percent in February for its second consecutive monthly decline. The index for utilities rose 3.7 percent, while the index for mining moved up 0.3 percent. At 109.7 percent of its 2012 average, total industrial production was 3.5 percent higher in February than it was a year earlier.
Overall, both EUR/USD and GBP/USD recovered nicely this past week, but they might correct in the short term before extending upsides.
Economic Releases to Watch Today
- Euro Zone Trade Balance Jan 2019 – Forecast €13.2B versus €15.6B previous.
- US NAHB Housing Market Index March 2019 – Forecast 63.0, versus 62.0 previous.
