Key Highlights
- The Euro declined heavily and broke the 1.1400 and 1.1350 supports against the US Dollar.
- There is a major bearish trend line formed with resistance at 1.1320 on the 4-hours chart of EUR/USD.
- The US Industrial Production in Jan 2019 declined 0.6% (MoM), whereas the forecast was +0.1%.
- The UK Rightmove House Price Index for Feb 2019 will be released today, which could increase 0.2% (MoM).
EURUSD Technical Analysis
The Euro started a major decline from the 1.1520 swing high against the US Dollar. The EUR/USD pair broke the 1.1400 and 1.1350 supports to move into a bearish zone.
Looking at the 4-hours chart, the pair even broke the 1.1300 support area and settled below the 100 (red) simple moving average (4-hours). Sellers pushed the pair towards the 1.1220 support area and a low was formed at 1.1234.
Later, the pair corrected higher and moved above the 1.1250 level and the 50% Fib retracement level of the last decline from the 1.1341 high to 1.1234 high.
However, there is a strong resistance formed near the 1.1315-1.1320 area. Moreover, there is also a major bearish trend line formed with resistance at 1.1320. Therefore, buyers need to push the pair above the 1.1320 resistance to start a decent rebound towards 1.1350 and 1.1400.
If buyers fail, there is a risk of a fresh decline below the 1.1250 and 1.1235 levels in the coming sessions. The main support is near the 1.1220 level, below which there could a sharp drop below 1.1200.
Recently in the US, the Industrial Production report for Jan 2019 was released. The market was looking for a 0.1% rise in production in Jan 2019, compared with the previous month.
However, the result was very disappointing as there was a 0.6% decline in the Industrial Production. Moreover, the last reading was revised down from +0.3% to +0.1%.
The report added that:
In January, manufacturing production fell 0.9 percent, primarily as a result of a large drop in motor vehicle assemblies; factory output excluding motor vehicles and parts decreased 0.2 percent.
Overall, there could be an upside correction in EUR/USD, but the pair is likely to face a lot of hurdles near 1.1320 and 1.1350.
Economic Releases to Watch Today
- UK Rightmove House Price Index for Feb 2019 (MoM) – Forecast 0.2%, versus 0.4% previous.
- UK Rightmove House Price Index for Feb 2019 (YoY) – Forecast +0.4%, versus +0.4% previous.
