- The Euro declined this past week and tested a major support at 1.2060 against the US Dollar.
- There is a key bearish trend line in place with resistance at 1.2150 on the 4-hours chart of EUR/USD.
- The US Gross Domestic Product Annualized reading in Q1 2018 (Prelim) came in at 2.3%, compared with the forecast of 2.0%.
- Today, the German CPI report for April 2018 (Prelim) will be released, which is forecasted to remain flat (MoM).
EURUSD Technical Analysis
The Euro remained in a bearish zone this past week and declined below 1.2200 against the US Dollar. The EUR/USD pair traded as low as 1.2056 before it found support.
It started an upside correction from the 1.2056 low and moved above 1.2080. There was also a break above the 23.6% Fib retracement level of the last decline from the 1.2244 high to 1.2056 low.
However, there are many resistances on the upside around the 1.2150 and 1.2170 levels. There is also a key bearish trend line in place with resistance at 1.2150 on the 4-hours chart.
The same trend line resistance is close to the 50% Fib retracement level of the last decline from the 1.2244 high to 1.2056 low. Therefore, a break above the 1.2150 resistance won’t be easy. More importantly, 1.2170-1.2180 area was a support earlier and now it is likely to prevent upsides.
The pair is currently trading well below declining 100 (red) and 200 (green) simple moving averages (4-hour), which is a bearish sign. Therefore, if the pair corrects higher, upsides are likely to be capped by 1.2150-1.2170.
This past week, the US Gross Domestic Product Annualized reading for Q1 2018 (Prelim) was released by the US Bureau of Economic Analysis. The market was looking for a growth of 2%, less than the last 2.9%.
However, the actual result was on the positive side as there was a growth of 2.3% in the GDP. The report added that:
Current-dollar GDP increased 4.3 percent, or $211.2 billion, in the first quarter to a level of $19.97 trillion. In the fourth quarter, current-dollar GDP increased 5.3 percent, or $253.5 billion.
Overall, the US Dollar is likely to remain in an uptrend versus the Euro, Pound and the Japanese Yen in the near term.
Economic Releases to Watch Today
- German Retail Sales for March 2018 (MoM) – Forecast +1.0%, versus -0.7% previous.
- German Retail Sales for March 2018 (YoY) – Forecast +1.5%, versus +1.3% previous.
- German Consumer Price Index for April 2018 (YoY) (Prelim) – Forecast +1.6%, versus +1.6% previous.
- German Consumer Price Index for April 2018 (MoM) (Prelim) – Forecast 0.0%, versus +0.4% previous.
- US Personal Income for March 2018 (MoM) – Forecast +0.4%, versus +0.4% previous.
- US Pending Home Sales for March 2018 (MoM) – Forecast +0.6%, versus +3.1% previous.