Can EUR/USD Recover Further Above 1.2000?14 May, 2018 by Aayush Jindal in Market Analysis
- The Euro declined towards 1.1825 against the US Dollar where buyers appeared.
- The EUR/USD pair recovered and moved above a bearish trend line with resistance at 1.1900 on the 4-hour chart.
- The pair correct further if buyers succeed in settling the pair above 1.2000.
- The Michigan Consumer Sentiment Index released recently for May 2018 (Prelim) posted no change from 98.8.
EURUSD Technical Analysis
The Euro declined heavily this past week and traded towards the 1.1800 level against the US Dollar. The EUR/USD pair traded as low as 1.1826 before buyers appeared and protected more losses.
Later, the pair started an upside correction and traded above the 23.6% Fib retracement level of the last decline from the 1.2138 high to 1.1826 low. There was also a break above a bearish trend line with resistance at 1.1900 on the 4-hour chart.
However, there are many barriers on the upside for buyers near the 1.2000 handle. The most important one is near 1.2015 and the 61.8% Fib retracement level of the last decline from the 1.2138 high to 1.1826 low.
A proper daily close above 1.2000 could started a substantial recovery in EUR/USD during the following days. On the other hand, a failure to move above 1.2000 may perhaps call for more losses towards 1.1800.
Overall, the pair is showing signs of a recovery, but a push and close above 1.2000 and 1.2015 won’t be easy in the near term. On the downside, supports are at 1.1850, 1.1825 and 1.1800.
Looking at the USD/JPY pair, there was a downside correction from the 110.00 resistance level. The pair traded lower and tested the 109.20 support zone. There may well be more downsides, but the pair remains supported above 108.20-30.