Key Highlights
- EUR/USD corrected lower after it struggled to clear 1.1380 and 1.1400.
- A crucial bullish trend line is forming with support at 1.1260 on the 4-hours chart.
- GBP/USD gained bullish momentum above the 1.2550 and 1.2620 resistance levels.
- Gold price traded to a new multi-year high at $1,818.
EUR/USD Technical Analysis
The Euro remained above the main 1.1250 support level against the US Dollar. This past week, EUR/USD traded as high as 1.1370 before it started a downside correction.
Looking at the 4-hours chart, the pair declined below the 1.1320 and 1.1300 support levels. It even broke the 1.1280 level, but the 1.1250 support zone prevented further losses.
The pair also stayed above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours). It recovered higher above 1.1300, and spiked above the 50% Fib retracement level of the downward move from the 1.1370 high to 1.1254 low.
On the downside, there is a crucial bullish trend line forming with support at 1.1260 on the same chart. Therefore, the pair must stay above the 1.1260 and 1.1250 support levels to continue higher. If not, there is a risk of a larger decline towards the 1.1200 and 1.1180 levels in the near term.
The first major resistance on the upside is near the 1.1350 level, above which the pair could surpass 1.1370 and test the 1.1400 resistance. Any further losses may perhaps lead EUR/USD towards the 1.1460 level.
Overall, the 1.1250 support holds the key for the next move in EUR/USD. Looking at GBP/USD, there was a strong rise above the 1.2550 and 1.2620 resistance levels. More importantly, gold price extended its rally above the $1,800 resistance (as discussed in the last analysis) and it traded to a new multi-year high at $1,818.
Upcoming Economic Releases
- BoE’s Governor Bailey speech.
- US Monthly Budget Statement.
