Key Highlights
- The Euro declined further and traded towards 1.1340 against the US Dollar.
- There is a major bearish trend line formed with resistance at 1.1460 on the 4-hours chart of EUR/USD.
- The US Gross Domestic Product for Q3 2018 (Preliminary) increased 3.5%, better than the 3.3% forecast.
- Today, the US Personal Income for Sep 2018 (MoM) will be released, which is forecasted to increase 0.3%.
EURUSD Technical Analysis
After forming a top near the 1.1550 level, the Euro started a major downside move against the US Dollar. The EUR/USD pair broke the 1.1460, 1.1440 and 1.1400 support levels and traded towards 1.1340.
Looking at the 4-hours chart, the pair faced a lot of selling interest below the 1.1440 level. It declined sharply and traded as low as 1.1337 low. Later, after the US GDP release, there was an upside correction from the 1.1337 low.
The pair climbed above the 23.6% Fib retracement level of the recent decline from the 1.1550 high to 1.1337 low. However, there are many barriers on the upside near the 1.1440 and 1.14460 levels.
Moreover, there is a major bearish trend line formed with resistance at 1.1460 on the 4-hours chart of EUR/USD. Below the trend line, the 50% Fib retracement level of the recent decline from the 1.1550 high to 1.1337 low is near 1.1445.
On the downside, an initial support is near the 1.1360 level followed by the 1.1340 level. A break below the recent low at 1.1337 could push the price towards the 1.1310 level in the near term.
Fundamentally, the US Gross Domestic Product for Q3 2018 (Preliminary) was released by the US Bureau of Economic Analysis. The market was looking for a grow rate of 3.3%, less than the last 4.2%.
The result was positive as the US GDP grew 3.5% in Q3 2018 as per the according to the “advance” estimate.
Moreover, the report added that:
The price index for gross domestic purchases increased 1.7 percent in the third quarter, compared with an increase of 2.4 percent in the second quarter.
Overall, the US Dollar remains in an uptrend, but there could be a short term recovery in EUR/USD and GBP/USD in the coming sessions.
Economic Releases to Watch Today
- US Personal Income for Sep 2018 (MoM) – Forecast +0.3%, versus +0.3% previous.
- US Core Personal Consumption Expenditure for Sep 2018 (MoM) – Forecast +0.1%, versus 0% previous.
- US Personal Spending for Sep 2018 (MoM) – Forecast +0.4%, versus +0.3% previous.
