EUR/USD Bracing For Next Upside Break?31 December, 2018 by Aayush Jindal in Forex Monthly, Market Analysis
- The Euro traded higher recently, but it struggled to break the 1.1490 resistance against the US Dollar.
- There is a major contracting triangle in place with resistance at 1.1465 on the 4-hours chart of EUR/USD.
- The US Pending Home Sales in Nov 2018 declined 0.7% (MoM), less than the last -2.6%.
- Today in the US, the Dallas Fed Manufacturing Business Index for Dec 2018 will be released, which is forecasted to rise to 18.5.
EURUSD Technical Analysis
The Euro made a nice upward move this past week and broke the 1.1400 and 1.1450 resistance levels against the US Dollar. However, the EUR/USD pair struggled once again to clear the 1.1480-1.1500 resistance zone.
Looking at the 4-hours chart, the pair made many attempts to break the 1.1480-1.1500 resistance zone, but buyers struggled to gain momentum. The recent high was formed at 1.1472 and later the pair started consolidating gains.
It broke the 1.1440 support and the 23.6% Fib retracement level of the last wave from the 1.1342 low to 1.1472 high. It seems like the pair may continue to move down and it could test the 1.1420 support.
The next main support is at 1.1405 and the 50% Fib retracement level of the last wave from the 1.1342 low to 1.1472 high. On the upside, the pair needs to break the 1.1470 and 1.1480 resistance levels to gain momentum.
Moreover, there is a major contracting triangle in place with resistance at 1.1465 on the same chart. Therefore, the pair seems to be preparing for the next move either above 1.1480 or towards 1.1400.
As long as the pair is above the 1.1400 support and the 100 simple moving average (red, 4-hours), buyers remain in control for a fresh upward move above the 1.1480 resistance.
Recently in the US, the Pending Home Sales report for Nov 2018 was released. The market was looking for a 0.7% decline in sales compared with the previous month.
The result was similar, but it was better than the last decline of -2.6%. However, the yearly change was disappointing since there was a decline of 0.7%, more than the last -6.7%.
Overall, EUR/USD is placed nicely above the 1.1400 support and it could make another attempt to clear the 1.1480 resistance area.
Economic Releases to Watch Today
- Dallas Fed Manufacturing Business Index for Dec 2018 – Forecast 18.5, versus 17.6 previous.