Key Highlights
- The Euro surged higher recently and succeeded in breaking the 1.2000 handle against the US Dollar.
- There is a crucial bullish trend line forming with support at 1.1980 on the 4-hours chart of EUR/USD.
- The recent high at 1.2080 is a short-term resistance followed by 1.2100.
- The US ISM Manufacturing Index increased in Dec 2017 to 59.7 from the previous 58.2.
EURUSD Technical Analysis
The New Year started with a bang for the Euro as it climbed above the 1.2000 handle against the US Dollar. The EUR/USD pair is now in a major uptrend above 1.1900 and 1.1940.
While analyzing the 4-hours chart, it is quite clear that the pair started a major uptrend from mid December 2017. It succeeded in trading above the 1.1800 and 1.1880 resistance levels, which cleared the path for more upsides toward 1.2000.
EUR/USD was successful in closing above the 100 (red) and 200 (green) simple moving averages, and broke the 1.2000 handle.
A new high for 2018 was formed at 1.2081 from where a minor correction wave was initiated. It broke the 23.6% Fib retracement level of the last wave from the 1.1817 low to 1.2081 high.
On the downside, there is a crucial bullish trend line forming with support at 1.1980 on the same chart. Should the pair continue to correct lower, it will most likely find bids around the 1.1980 level.
The stated 1.1980 support is also the 38.2% Fib retracement level of the last wave from the 1.1817 low to 1.2081 high. Therefore, a break below 1.1980 won’t be easy. On the upside, the pair faces a short-term resistance at 1.2080. Above 1.2080, the Euro is likely to accelerate gains above the 1.2100 level.
Recently, the US saw December’s Institute for Supply Management (ISM) Manufacturing Index. It posted an increase from 58.2 to 59.7, which was better than the forecast of 58.1.
As a result, the EUR/USD pair might correct a few more pips in the near term, but it remains well supported above the 1.1980 and 1.1940 levels.
