Key Highlights
- The Euro failed to settle above 1.1200 and declined below 1.1150 against the US Dollar.
- A crucial bearish trend line is forming with resistance near 1.1210 on the 4-hours chart.
- The US Building Permits in July 2019 jumped 8.4%, more than the 5.6% forecast.
- The Euro Zone CPI in July 2019 might decline 0.4% (MoM), down from the last +0.2%.
EUR/USD Technical Analysis
After struggling near the 1.1250 level, the Euro started a fresh decline against the US Dollar. The EUR/USD pair declined below the 1.1150 support to move back into a bearish zone.
Looking at the 4-hours chart, the pair settled below the 1.1150 support and the 100 simple moving average (red, 4-hours). Moreover, there was a break below the 50% Fib retracement level of the last key recovery from the 1.1027 low to 1.1249 high.
The pair is now trading in a bearish zone and it recently declined below 1.1100. It even traded below the 76.4% Fib retracement level of the last key recovery from the 1.1027 low to 1.1249 high.
The current price action suggests more losses below the 1.1050 support level. In the mentioned case, EUR/USD may perhaps decline below the 1.1027 swing low and trade to a new 2019 low.
On the upside, an immediate resistance is near the 1.1150 level (the previous support) and the 100 simple moving average (red, 4-hours). More importantly, there is a crucial bearish trend line forming with resistance near 1.1210 on the same chart.
Therefore, an upside correction from the current level or lower levels might face a strong resistance near the 1.1150, 1.1180 and 1.1200 levels.
Fundamentally, the US Building Permits report for July 2019 was released this past Friday by the US Census Bureau, at the Department of Commerce. The market was looking for a 5.6% rise in permits compared with the previous month.
However, the actual result was better than the forecast, as there was a 8.4% rise in privately‐owned housing units authorized by building permits. Moreover, single‐family authorizations in July were at a rate of 838,000, which is 1.8% higher than the last reading.
The report added:
Privately‐owned housing starts in July were at a seasonally adjusted annual rate of 1,191,000. This is 4.0 percent (±8.0 percent)* below the revised June estimate of 1,241,000, but is 0.6 percent (±8.2 percent)* above the July 2018 rate of 1,184,000.
Clearly, EUR/USD is slowly gaining bearish momentum below 1.1150, while GBP/USD is correcting higher towards the key 1.2200 resistance area.
Economic Releases to Watch Today
- Euro Zone CPI for July 2019 (YoY) – Forecast +1.1%, versus +1.1% previous.
- Euro Zone CPI for July 2019 (MoM) – Forecast -0.4%, versus +0.2% previous.
- Euro Zone Core CPI for July 2019 (YoY) – Forecast +0.9%, versus +0.9% previous.
