Key Highlights
- The Euro failed to surpass the 1.1440 resistance and declined recently against the US Dollar.
- There was a break below a key bullish trend line with support at 1.1330 on the 4-hours chart of EUR/USD.
- The US Retail Sales in Nov 2018 increased 0.2% (MoM), similar to the forecast.
- Today, the Euro Zone CPI for Nov 2018 will be released, which is forecasted to decline 0.2% (MoM).
EURUSD Technical Analysis
The Euro failed to hold gains above the 1.1400 support after it struggled to surpass the 1.1440 resistance against the US Dollar. The EUR/USD pair declined and broke the 1.1380 and 1.1350 supports.
Looking at the 4-hours chart, the pair declined heavily and even broke the 1.1320 support and the 100 simple moving average (red, 4-hours). Sellers pushed the pair below the 76.4% Fib retracement level of the last wave from the 1.1267 low to 1.1442 high.
Moreover, there was a break below a key bullish trend line with support at 1.1330 on the same chart. The decline was such that the pair traded close to the 1.1267 low. On the downside, the next support is at 1.1250, below which the pair may test the 1.236 Fib extension level of the last wave from the 1.1267 low to 1.1442 high at 1.1225.
On the upside, the previous support at 1.1320 could act as a strong resistance. The main resistance is near 1.1355 and the 100 simple moving average (red, 4-hours).
Fundamentally, the US Retail Sales for Nov 2018 was released by the US Census Bureau. The market was looking for an increase of 0.2% in sales in Nov 2018 compared with the previous month.
The result was similar to the forecast and the last reading was revised up from +0.9% to +1.1%. The core retail sales increased 0.2%, less than the last revised reading of +1.0% (up from +0.7%). The report stated that:
Total sales for the September 2018 through November 2018 period were up 4.3 percent (±0.5 percent) from the same period a year ago. The September 2018 to October 2018 percent change was revised from up 0.8 percent (±0.5 percent) to up 1.1 percent (±0.2 percent).
Overall, both EUR/USD and GBP/USD remain in a downtrend and there could be more losses in the coming sessions.
Economic Releases to Watch Today
- Euro Zone CPI for Nov 2018 (YoY) – Forecast +2.0%, versus +2.0% previous.
- Euro Zone CPI for Nov 2018 (MoM) – Forecast -0.2%, versus +0.2% previous.
- Euro Zone Core CPI for Nov 2018 (YoY) – Forecast +1.0%, versus +1.0% previous.
