Key Highlights
- EUR/USD declined below the 1.1100 and 1.1050 levels.
- A major bearish trend line is forming with resistance near 1.1075 on the 4-hour chart.
- GBP/USD is struggling to stay above the 1.2800 support zone.
- The Euro Zone CPI could decline to 5.2% in July 2023 (YoY, Preliminary).
EUR/USD Technical Analysis
The Euro started a fresh decline from the 1.1275 zone against the US Dollar. EUR/USD declined below the 1.1120 and 1.1100 support levels.
Looking at the 4-hour chart, the pair even traded below the 1.1050 level and the 100 simple moving average (red, 4 hours). Finally, the pair spiked below the 200 simple moving average (green, 4 hours).
It tested the 1.0940 support zone. A low is formed near 1.0943 and the pair is now consolidating losses. There was a minor increase above the 1.0985 level and the 200 simple moving average (green, 4 hours).
However, the pair is facing resistance near the 1.1045 level. The first major resistance is near the 1.1080 level and the 100 simple moving average (red, 4 hours). There is also a major bearish trend line forming with resistance near 1.1075 on the same chart.
A close above the trend line and 1.1100 could set the pace for a fresh increase. If not, the pair could continue to move down. On the downside, the pair might find bids near the 1.0940 level. The next major support is near 1.0880, below which EUR/USD could slide toward the 1.0820 zone.
Looking at GBP/USD, the pair could gain bearish momentum if the bulls fail to protect the 1.2800 support zone.
Economic Releases
- Euro Zone CPI for July 2023 (YoY, Preliminary) – Forecast +5.2%, versus +5.5% previous.
- Euro Zone CPI for July 2023 (MoM, Preliminary) – Forecast +0.1%, versus +0.3% previous.
