Key Highlights
- EUR/USD found support near 1.1070 and rallied above 1.1150.
- A major bearish trend line was breached with resistance near 1.1110 on the 4-hours chart.
- GBP/USD is back above 1.3050 and it might consolidate in the near term.
- The US Pending Home Sales might increase 5.8% in Nov 2019 (YoY).
EUR/USD Technical Analysis
After a downside correction, EUR/USD found support near the 1.1070 level. A support base was formed and the Euro started a fresh increase above 1.1100 against the US Dollar.
Looking at the 4-hours chart, the pair remained well bid above the 200 simple moving average (green, 4-hours) and recently climbed above the 100 simple moving average (red, 4-hours).
Furthermore, there was a break above the 50% Fib retracement level of the downward move from the 1.1199 high to 1.1066 low. More importantly, the pair surpassed a major bearish trend line with resistance near 1.1110.
It is now trading above 1.1150, and the 76.4% Fib retracement level of the downward move from the 1.1199 high to 1.1066 low.
Therefore, there are chances of more upsides above the 1.1200 resistance area. In the mentioned case, EUR/USD could even aim 1.1250.
Conversely, there might be another downside correction towards the 1.1150 support. The main support is now near the 1.1110 level and the 100 simple moving average (red, 4-hours). If there is a successful close below 1.1100, the bears are likely to gain traction.
Looking at GBP/USD, the pair is back above 1.3000 and 1.3050. However, there are many hurdles on the upside near 1.3120 and 1.3160.
Upcoming Economic Releases
- US Pending Home Sales for Nov 2019 (YoY) – Forecast +5.8%, versus +4.4% previous.
- Chicago Purchasing Manager’s Index for Dec 2019 – Forecast 47.9, versus 46.3 previous.
