Key Highlights
- The Euro recovered nicely after testing the 1.1025 support area against the US Dollar.
- EUR/USD is facing resistance near 1.1240 and a bearish trend line on the 4-hours chart.
- China’s CPI in July 2019 increased 2.8% (YoY), more than the 2.7% forecast.
- GBP/USD is under a lot of pressure and recently declined to a new multi-year low below 1.2050.
EUR/USD Technical Analysis
This past week, the Euro started a strong recovery from the 1.1027 swing low against the US Dollar. The EUR/USD pair climbed above the 1.1100 and 1.1150 resistance levels, but GBP/USD remained in a strong downtrend.
Looking at the 4-hours chart of EUR/USD, the pair recovered nicely above the 1.1100 pivot level. There was a successful close above the 1.1150 resistance and the 100 simple moving average (red, 4-hours).
It opened the doors for more gains above the 1.1200 level. However, the upward move was capped by the 1.1250 resistance and the 200 simple moving average (green, 4-hours). Moreover, there is a major resistance forming near 1.1240 and a bearish trend line.
A swing high was formed at 1.1249 and the pair is currently correcting gains. It traded below the 23.6% Fib retracement level of the recovery from the 1.1027 low to 1.1249 high.
On the downside, the 1.1160 and 1.1150 levels are important supports. Besides, the 100 simple moving average (red, 4-hours) is also near 1.1160 to act as a strong support.
If there is a daily close below 1.1150, EUR/USD could slide back towards the 1.1100 or 1.1080 support. Conversely, a successful break above the 1.1240 and 1.1250 resistance levels might push the pair towards the 1.1300 resistance.
Looking at GBP/USD, there was a strong decline and the pair traded to a new multi-year low below 1.2050. Conversely, gold price rallied above the $1,480 and $1,500 resistance levels. A new 2019 high was formed near $1,515 and the price is clearly in a strong uptrend.
