Sat, Oct 23, 2021 @ 18:21 GMT
HomeContributorsTechnical AnalysisEUR/USD Breaks 1.1800, Dollar Extends Decline

EUR/USD Breaks 1.1800, Dollar Extends Decline

Key Highlights

  • EUR/USD started a decent increase above the key 1.1800 resistance zone.
  • It broke a major bearish trend line at 1.1770 on the 4-hours chart.
  • GBP/USD also gained traction and it surpassed the 1.3800 resistance.
  • USD/JPY extended its decline below the 110.00 support.

EUR/USD Technical Analysis

The Euro formed a support base above the 1.1665 level against the US Dollar. EUR/USD started a steady increase and it broke the key 1.1800 resistance zone.

Looking at the 4-hours chart, the pair was able to clear a major bearish trend line at 1.1770. It settled above the 1.1800 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

It even broke the 1.1850 resistance and spiked above 1.1900. A high was formed near 1.1909 and the pair is now consolidating gains.

An immediate support is near the 1.1850 level. It is close to the 23.6% Fib retracement level of the upward move from the 1.1663 swing low to 1.1909 high. The next major support is near 1.1800.

The main support is forming near the 1.1780 level and the 200 simple moving average (green, 4-hours). It coincides with the 50% Fib retracement level of the upward move from the 1.1663 swing low to 1.1909 high.

On the upside, an immediate resistance is near the 1.1900 zone. The next major resistance could be 1.1940, above which EUR/USD could test 1.2000.

Looking at GBP/USD, the pair was able to clear the main 1.3800 resistance and it even spiked above the 1.3850 level.

Economic Releases

  • German Factory Orders for July 2021 (MoM) – Forecast -1.0%, versus +4.1% previous.
  • UK’s Construction PMI for August 2021 – Forecast 56.9, versus 58.7 previous.

 

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