Key Highlights
- EUR/USD recovered sharply after trading to a new yearly low at 1.0777.
- A key bullish trend line is forming with support near 1.0950 on the 4-hours chart.
- GBP/USD is struggling and it recently dived below 1.2850.
- The Euro Zone Manufacturing PMI could remain at 49.1 in Feb 2020.
EUR/USD Technical Analysis
This past week, the Euro gained bullish momentum above the 1.0850 and 1.0900 resistance levels against the US Dollar. EUR/USD even climbed above 1.1000 to move into a positive zone.
Looking at the 4-hours chart, the pair settled nicely above the 1.0950 pivot level and the 100 simple moving average (red, 4-hours). Besides, there was a break above the 61.8% Fib retracement level of the last key decline from the 1.1094 high to 1.0777 low.
The pair tested the 1.1060 resistance area and settled above the 200 simple moving average (green, 4-hours). If the bulls continue to gain strength above the 76.4% Fib retracement level of the last key decline from the 1.1094 high to 1.0777 low, there are chances of more upsides.
The next stop for the bulls could be 1.0990 or 1.1100 in the near term. Any further gains may perhaps lead EUR/USD towards the 1.1140 level.
Conversely, the pair might correct lower below 1.0975. However, there are many supports near 1.0950 and 1.0920. Moreover, there is a key bullish trend line forming with support at 1.0950.
Fundamentally, the Germany consumer price index for Feb 2020 (Prelim) was released this past Friday by the Statistisches Bundesamt Deutschland. The market was looking for a 0.3% increase in the CPI compared with the previous month.
The actual result was above the market forecast, as the German CPI increased 0.4% (MoM). Looking at the yearly change, there was a 1.7% rise in the CPI, similar to the forecast.
Overall, EUR/USD is showing a lot of positive signs and it could recover towards 1.1100 unless there is a clear break below 1.0920. Conversely, GBP/USD declined heavily below the 1.2850 support.
Upcoming Economic Releases
- Germany’s Manufacturing PMI for Feb 2020 – Forecast 47.8, versus 47.8 previous.
- Euro Zone Manufacturing PMI Feb 2020 – Forecast 49.1, versus 49.1 previous.
- UK Manufacturing PMI for Feb 2020 – Forecast 51.9, versus 51.9 previous.
- US Manufacturing PMI for Feb 2020 – Forecast 50.8, versus 50.8 previous.
- US ISM Manufacturing PMI for Feb 2020 – Forecast 50.5, versus 50.9 previous.
