Key Highlights
- After a long struggle, the Euro managed to clear the 1.1000 resistance against the US Dollar.
- A connecting bullish trend line is forming with support near 1.1000 on the 4-hours chart of EUR/USD.
- The Michigan Consumer Sentiment Index increased from 93.2 to 96.0 in Oct 2019 (Prelim).
- The Euro Zone Industrial Production might increase 0.3% in August 2019 (MoM).
EUR/USD Technical Analysis
This past week, we discussed the importance of the 1.1000 and 1.1020 resistance levels for the Euro against the US Dollar. EUR/USD made many attempts to surpass 1.1000 and later managed to climb towards 1.1050.
Looking at the 4-hours chart, the pair broke a couple of important resistances near the 1.1000 level and even settled above the 100 simple moving average (red, 4-hours).
It opened the doors for more gains above the 1.1020 resistance and the 200 simple moving average (green, 4-hours). The pair even broke the 1.1050 resistance and traded as high as 1.1062.
Recently, the pair started a downside correction and traded below 1.1040. It corrected below the 23.6% Fib retracement level of the upward move from the 1.0948 low to 1.1062 high. However, there are many key supports near the 1.1000 level (the previous resistance).
Moreover, there is a connecting bullish trend line forming with support near 1.1000 on the same chart. Besides, the 50% Fib retracement level of the upward move from the 1.0948 low to 1.1062 high is also near the 1.1000 area.
Therefore, if there is a downside correction towards 1.1000, the pair is likely to find a strong buying interest. On the upside, there are hurdles near the 1.1060 and 1.1075 levels, above which EUR/USD could rise towards the 1.1100 level.
Looking at GBP/USD, there was a sharp rally above the 1.2500 resistance area. Additionally, USD/JPY also climbed towards the 108.50 resistance area.
Upcoming Economic Releases
- Euro Zone Industrial Production for August 2019 (MoM) – Forecast +0.3%, versus -0.4% previous.
- Euro Zone Industrial Production for August 2019 (YoY) – Forecast -2.5%, versus -2.0% previous.
