Key Highlights
- The Euro failed to break the 1.1400 resistance and declined against the US Dollar.
- There are two major bearish trend lines in place with resistance at 1.1375 and 1.1410 on the 4-hours chart of EUR/USD.
- The Euro Zone CPI (Prelim) for Nov 2018 increased 2% (YoY), less than the last 2.2%.
- Today, the Euro Zone Manufacturing PMI for Nov 2018 will be released, which is forecasted to remain at 51.5.
EURUSD Technical Analysis
This past week, the Euro recovered from the 1.1265 support zone against the US Dollar. However, the EUR/USD pair struggled to break the 1.1400 resistance and later declined.
Looking at the 4-hours chart, the pair traded just above the 1.1400 level and tested the 200 simple moving average (green, 4-hours). Sellers defended more gains, resulting in a downside push below the 1.1375 and 1.1350 support levels.
The pair even broke the 50% Fib retracement level of the last wave from the 1.1267 low to 1.1402 high. Moreover, there was a close below the 1.1350 level and the 100 simple moving average (red, 4-hours).
The pair is clearly under pressure below 1.1350 and it seems like it could decline further. The main support on the downside is at 1.1265, below which the pair could decline towards the 1.1220 support zone.
On the upside, there are many hurdles near 1.1350-60 and the 100 SMA. Moreover, there are two major bearish trend lines in place with resistance at 1.1375 and 1.1410 on the same chart. A successful close above 1.1400-1.1410 is needed for buyers to gain strength in the near term.
Fundamentally, the Euro Zone CPI (Prelim) for Nov 2018 was released recently by the Eurostat. The market was looking for an increase of 2% in the Euro Zone CPI compared with the same month a year ago.
The result was in line with the forecast as the Euro Zone CPI increased 2%, but it was less than the last 2.2%. Moreover, the Core CPI increased 1%, less than the market forecast of 1.1%.
Therefore, the EUR/USD pair may continue to struggle to clear the 1.1400 resistance area and it could consolidate above 1.1220 in the short term.
Economic Releases to Watch Today
- Germany’s Manufacturing PMI for Nov 2018 – Forecast 51.6, versus 51.6 previous.
- Spanish Manufacturing PMI for Nov 2018 – Forecast 51.6, versus 51.8 previous.
- Euro Zone Manufacturing PMI Nov 2018 – Forecast 51.5, versus 51.5 previous.
- UK Manufacturing PMI for Nov 2018 – Forecast 51.5, versus 51.1 previous.
- US Manufacturing PMI for Nov 2018 – Forecast 55.4, versus 55.4 previous.
- US ISM Manufacturing PMI for Nov 2018 – Forecast 57.8, versus 57.7 previous.
