Wed, Dec 07, 2022 @ 12:33 GMT
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EUR/USD Recovers But Faces Uphill Task

Key Highlights

  • EUR/USD started an upside correction above the 0.9700 level.
  • It is facing a major resistance near 0.9820 and 0.9900 on the 4-hours chart.
  • GBP/USD climbed higher sharply above the 1.0850 resistance zone.
  • The US ISM Manufacturing PMI could decline from 52.8 to 52.3 in Sep 2022.

EUR/USD Technical Analysis

The Euro started a steady decline from well above the 1.0150 level against the US Dollar. EUR/USD traded to a new multi-year low at 0.9537 before it started a recovery.

Looking at the 4-hours chart, the pair was able to climb above the 0.9650 and 0.9720 resistance levels. There was a move above the 38.2% Fib retracement level of the downward move from the 1.0197 swing high to 0.9537 low.

It even attempted a move above the 0.9820 resistance zone. However, the pair is facing a major resistance near 0.9820 and 0.9900 on the same chart.

The 50% Fib retracement level of the downward move from the 1.0197 swing high to 0.9537 low is acting as a resistance. The first major resistance is near 0.9900 and the 100 simple moving average (red, 4-hours).

A clear move above the 0.9900 level might send the pair towards the 1.0000 level or at least the 200 simple moving average (green, 4-hours).

On the downside, an initial support is near the 0.9740 level. The main support sits at the 0.9700 level. A downside break below the 0.9700 zone might send the pair towards the 0.9620 level. The next major support is near the 0.9550 level, below which the pair could even test the 0.9400 support zone.

Looking at GBP/USD, the pair started an upside correction and the bulls were able to push the pair above the 1.0850 resistance zone.

Economic Releases

  • Germany’s Manufacturing PMI for Sep 2022 – Forecast 48.3, versus 48.3 previous.
  • Euro Zone Manufacturing PMI for Sep 2022 – Forecast 48.5, versus 48.5 previous.
  • UK Manufacturing PMI for Sep 2022 – Forecast 48.5, versus 48.5 previous.
  • US Manufacturing PMI for Sep 2022 – Forecast 51.8, versus 51.8 previous.
  • US ISM Manufacturing PMI for Sep 2022 – Forecast 52.3, versus 52.8 previous.
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