Key Highlights
- The Euro traded higher this past week, but it failed to move above the 1.2550 resistance against the US Dollar.
- There is a major bullish trend line forming with support at 1.2380 on the 4-hours chart of EUR/USD.
- The US Building Permits rose 7.4% in Jan 2018 (MoM), more than the forecast of 3.5%.
- The US Housing Starts grew 9.7% in Jan 2018 (MoM), better than the forecast of 3.4%.
EURUSD Technical Analysis
The Euro made good ground this past week and traded above 1.2500 against the US Dollar. The EUR/USD pair faced sellers near 1.2550 and later it started a downside correction.
Looking at the 4-hours chart of EUR/USD, there was a clear failure to break an important resistance area near 1.2520-1.2550. The pair started a downside correction and moved below the 23.6% Fib retracement level of the last wave from the 1.2205 low to 1.2555 high.
However, there are many supports on the downside, including a major bullish trend line with support at 1.2380 on the same chart. Moreover, the 50% Fib retracement level of the last wave from the 1.2205 low to 1.2555 high is near 1.2380.
As long as the pair is above the 1.2350-1.2380 support zone, it remains in an uptrend. On the upside, an initial resistance is at 1.2450, followed by 1.2500. However, the most significant resistance is near 1.2520-1.2550, which would be hard to breach.
UK US Building Permits and Housing Starts
This past Friday, the US Building Permits and Housing Starts report for Jan 2018 was released by the US Census Bureau, at the Department of Commerce.
The US Building Permits was forecasted to increase by 3.4% in Jan 2018 compared with the previous month. However, the actual was better, as there was a rise of 7.4%. Similarly, the Housing Starts increased 9.7% in Jan 2018 compared with the previous month, better than the forecast of 3.4%.
The report added about the building permits:
This is 7.4 percent (±1.2 percent) above the revised December rate of 1,300,000 and is 7.4 percent (±1.9 percent) above the January 2017 rate of 1,300,000. Single-family authorizations in January were at a rate of 866,000; this is 1.7 percent (±1.3 percent) below the revised December figure of 881,000.
Overall, the Euro could decline a few pips, but the stated 1.2350-1.2380 support zone holds the key for the next move.
