Key Highlights
- The Euro made a nice upside move this past week and settled above the 1.1850 resistance.
- There is a major bullish trend line forming with support at 1.1840 on the 4-hours chart of EUR/USD.
- The US Manufacturing PMI in Nov 2017 (Preliminary) declined from 54.6 to 53.8.
- The US New Home Sales report for Oct 2017 will be released today, which is forecasted to post a decline of -6.3%.
EURUSD Technical Analysis
The Euro traded higher this past week and broke the 1.1820 and 1.1850 resistance levels against the US Dollar. The EUR/USD pair is now well above 1.1850 and remains well supported on the downside.
The pair recently traded as high as 1.1946 and is currently correcting lower. An initial support on the downside is around the 23.6% Fib retracement level of the last wave from the 1.1712 low to 1.1946 high.
There is also a major bullish trend line forming with support at 1.1840 on the 4-hours chart. The trend line support is near the 50% Fib retracement level of the last wave from the 1.1712 low to 1.1946 high.
Therefore, the 1.1850 and 1.1840 support levels are very important if the pair corrects lower from the current levels. On the upside, a break above 1.1946 would call for a test of the 1.2000 handle in the near term.
US Manufacturing PMI
Recently in the US, the Manufacturing Purchasing Managers Index (PMI) for Nov 2017 (Preliminary) was released by the Markit Economics. The market was looking for a rise in the PMI from 54.6 to 54.8.
However, the actual result was on the lower side, as there was a decline in the PMI from 54.6 to 53.8, but it was way above the neutral level.
The report added:
November data pointed to another solid increase in U.S. private sector output, supported by sustained growth in both manufacturing and services activity. At 54.6, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index was above the 50.0 no-change threshold, but eased from 55.2 in October.
Overall, the EUR/USD pair remains well supported around 1.1850, and dips toward 1.1850 and 1.1840 will most likely face buyers in the near term.
