Key Highlights
- The Euro gained heavily this past week and traded a few pips above 1.2500 against the US Dollar.
- There is a major bullish trend line forming with current support at 1.2320 on the 4-hours chart of EUR/USD.
- The pair is currently correcting lower, but it remains supported above 1.2280 and 1.2320.
- The US Personal Income figures for Dec 2017 will be released today, forecast +0.3% versus previous +0.3%.
EUR/USD Technical Analysis
The Euro started a nasty upside move this past week and traded higher by more than 200 pips. The EUR/USD pair even traded above 1.2500 before starting a downside correction.
During the upside move, the pair broke a few important resistance levels such as 1.2320, 1.2400 and 1.2480. It traded as high as 1.2537 before a downside correction was initiated.
The pair traded below the 23.6% Fib retracement level of the last wave from the 1.2223 low to 1.2537 high. The downside correction was sharp as the pair failed to hold the 1.2400 support area.
It tested the 50% Fib retracement level of the last wave from the 1.2223 low to 1.2537 high. At the moment, the pair is trading around the 1.2400 level and is moving in a range.
On the downside, there is a major bullish trend line forming with current support at 1.2320 on the 4-hours chart of EUR/USD. The trend line support is significant above 1.2300 since the 1.2300-1.2320 area was a resistance earlier and now it is likely to prevent declines.
An intermediate support is around the 61.8% Fib retracement level of the last wave from the 1.2223 low to 1.2537 high at 1.2343. As long as the pair is above the 1.2320 and 1.2300 support levels, it remains in an uptrend.
On the upside, an initial resistance is at 1.2450 followed by the 1.2500 level. Overall, the US Dollar is under a lot of pressure since USD/JPY traded below the 110.00 support and it remains at a risk of more declines in the near term.
