Key Highlights
The Euro failed to move above 1.2420 and declined sharply against the US Dollar.
There was a break below a major bullish trend line with support at 1.2365 on the 4-hours chart of EUR/USD.
The Euro Zone Manufacturing PMI for April 2018 (Prelim) will be released today, which is forecasted to remain at 56.6.
The US Existing Home Sales report for March 2018 (MoM) will be released today, which is forecasted to increase by 1.3%.
EURUSD Technical Analysis
This past week, the Euro made many attempts to break the 1.2400 and 1.2420 resistance levels against the US Dollar. The EUR/USD pair failed to settle above 1.2400, which resulted in a sharp downward move.
During the decline, there was a break below a major bullish trend line with support at 1.2365 on the 4-hours chart. The pair also broke the 50% Fib retracement level of the last wave from the 1.2215 low to 1.2413 high.
Moreover, there was a close below the 100 (red) simple moving average (4-hours) and the 200 (green) simple moving average (4-hours). These are negative signs and suggests that EUR/USD moved into a bearish zone below 1.2360.
On the downside, a close below the 76.4% Fib retracement level of the last wave from the 1.2215 low to 1.2413 high could result in further losses. The next support is near the last swing low of 1.2215, followed by 1.2200.
If the pair corrects higher from the current levels, it may perhaps face resistances near 1.2320, the 100 (red) simple moving average (4-hours) and the 200 (green) simple moving average (4-hours).
Economic Releases to Watch Today
- Germany’s Manufacturing PMI for April 2018 (Preliminary) – Forecast 57.6, versus 58.2 previous.
- Germany’s Services PMI for April 2018 (Preliminary) – Forecast 53.8, versus 53.9 previous.
- Euro Zone Manufacturing PMI April 2018 (Preliminary) – Forecast 56.6, versus 56.6 previous.
- Euro Zone Services PMI for April 2018 (Preliminary) – Forecast 55.0, versus 54.9 previous.
- US Manufacturing PMI for April 2018 (Preliminary) – Forecast 55.0, versus 55.6 previous.
- US Services PMI for April 2018 (Preliminary) – Forecast 54.0, versus 54.0 previous.
- US Existing Home Sales for March 2018 (MoM) – Forecast +1.3%, versus +3.0% previous.
