Key Highlights
- The Euro struggled to move above 1.2370 against the US Dollar and declined this past week.
- There is a major bearish trend line forming with resistance at 1.2375 on the 4-hours chart of EUR/USD.
- The US Industrial Production increased 1.1% in Feb 2018 compared with the +0.3% forecast.
- Today, the Euro Zone Trade Balance figure for Jan 2018 will be released, which is forecasted to post a surplus of €23.6B.
EURUSD Technical Analysis
The Euro moved down this past week after it failed to move above the 1.2370 resistance against the US Dollar. The EUR/USD is now trading well below 1.2350 and it remains at a risk of more losses.
There was an upside move this past week from the 1.2285 swing low. However, the pair failed to move above the 1.2380-90 levels and started a downside move. There was a break below the 38.2% Fib retracement level of the last wave from the 1.2154 low to 1.2446 high.
The pair is now trading well below 1.2350 and the 200 simple moving average (green, 4-hour). On the downside, the pair must stay above the 1.2260 support to avoid further declines.
A close below the 1.2260 and 1.2250 support levels could ignite more losses toward the 1.2200 level. On the upside, the pair has to break a major bearish trend line forming with resistance at 1.2375 on the 4-hours chart to gain upside momentum.
This past week, the US Industrial Production report for Feb 2018 was released by the Board of Governors of the Federal Reserve. The market was looking for a 0.3% rise in Feb 2018 compared with the previous month.
The real outcome was better as there was a rise of 1.1% in the Industrial Production, which was also better than the last decline of 0.3%. The report added that:
Manufacturing production increased 1.2 percent in February, its largest gain since October. Mining output jumped 4.3 percent, mostly reflecting strong gains in oil and gas extraction.
The overall market sentiment is favoring the US Dollar and EUR/USD could break the 1.2260 support level in the near term.
Economic Releases to Watch Today
- Euro Zone Trade Balance Jan 2018 – Forecast €23.6B versus €23.8B previous.
- Euro Zone Construction Output Jan 2018 (YoY) – Forecast +1.3%, versus +0.5% previous.
- Euro Zone Construction Output Jan 2018 (MoM) – Forecast +0.6%, versus +0.1% previous.
