Key Highlights
- EUR/USD is struggling to clear the 1.1900 and 1.1920 resistance levels.
- A declining channel is forming with resistance near 1.1880 on the 4-hours chart.
- GBP/USD tumbled below 1.3000 and 1.2950 support levels.
- Gold price is facing a strong resistance near the $1,950 level.
EUR/USD Technical Analysis
This past week, the Euro retested the 1.1750 support level against the US Dollar. EUR/USD started a fresh increase above 1.1850, but it seems to be facing hurdles near 1.1900 and 1.1920.
Looking at the 4-hours chart, the pair topped near the 1.1918 and corrected lower. There was a break below the 1.1850 support level. The pair traded below the 50% Fib retracement level of the upward move from the 1.1753 low to 1.1918 high.
Finally, the pair even spiked below the 200 simple moving average (green, 4-hours), but it found support near the 61.8% Fib retracement level of the upward move from the 1.1753 low to 1.1918 high.
It seems like there is a key declining channel forming with resistance near 1.1880 on the same chart. A successful close above the 1.1880 and 1.1900 resistance levels is must to start a strong increase in the coming sessions.
Conversely, the pair could break the 1.1820 support and revisit the 1.1750 support. Any further losses could lead EUR/USD towards the 1.1700 level.
Fundamentally, the US Consumer Price Index report for August 2020 was released this past Friday by the US Bureau of Labor Statistics. The market was looking for a 1.2% rise in the CPI, compared with the same month a year ago.
The actual result was above the market forecast, as the US Consumer Price Index increased 1.3% (YoY). The monthly change was 0.4%, more than the 0.3% market forecast.
The report added:
The index for all items less food and energy rose 0.4 percent in August after increasing 0.6 percent in July. The indexes for education and personal care were among the few to decline.
Overall, EUR/USD must break 1.1900 to continue higher. Looking at GBP/USD, there was a strong decline below the 1.3000 support and the pair even traded below the 1.2800 level.
Upcoming Economic Releases
- Euro Zone Industrial Production for July 2020 (MoM) – Forecast +10.0%, versus +9.1% previous.
