Key Highlights
- The Euro started a downside correction below the 1.1100 support against the US Dollar.
- EUR/USD traded below a key bullish trend line with support near 1.1095 on the 4-hours chart.
- GBP/USD also started a downside correction after trading as high as 1.3012.
- Chicago’s Fed Manufacturing Business Index could decline from 1.5 to 1.4 in Oct 2019.
EUR/USD Technical Analysis
After a steady rise, the Euro struggled to surpass the 1.1180 resistance area against the US Dollar. As a result, EUR/USD started a downside correction below the 1.1120 and 1.1100 support levels.
Looking at the 4-hours chart, the pair traded below a couple of important supports near the 1.1100 level, but it is still trading above the 100 simple moving average (red, 4-hours).
During the decline, the pair traded below a key bullish trend line with support near 1.1095. Moreover, there was a break below the 50% Fib retracement level of the upward move from the 1.0991 low to 1.1179 high.
On the downside, there are many key supports near 1.1050, 1.1040, and the 100 SMA. The main support is near the 1.1020 and the 200 SMA (green, 4-hours). If there is a close below the 200 SMA, the pair could move back into a bearish zone.
Conversely, EUR/USD may perhaps start a fresh increase from the 1.1050 or 1.1020 support levels. An immediate resistance is near the 1.1120 area, above which the pair could rise steadily towards 1.1150 or 1.1180.
Fundamentally, the German IFO business sentiment index for Oct 2019 was released by the CESifo Group. The market was looking for a drop from the last reading of 94.6 to 94.5.
However, the actual result was stable, as there was no decline in the German IFO business sentiment index from 94.6. However, the German IFO Current Assessment declined from the last revised reading of 98.6 to 97.8.
The report added:
Companies’ assessment of the current situation was slightly worse than last month. However, the outlook improved slightly. The German economy is stabilizing.
Overall, EUR/USD is likely to find support near 1.1050 or 1.1020. Similarly, there are many key supports for GBP/USD near the 1.2800 and 1.2740 levels.
Upcoming Economic Releases
- Chicago Fed Manufacturing Business Index for Oct 2019 – Forecast 1.4, versus 1.5 previous.
- European Central Bank’s president Mario Draghi’s speech.
