EUR/USD Back In Bearish Zone Below 1.164006 August, 2018 by Aayush Jindal in Market Analysis
- The Euro moved down sharply and broke the 1.1650 support against the US Dollar.
- There was a break below a key bullish trend line with support at 1.1645 on the 4-hours chart of EUR/USD.
- The US nonfarm payrolls in July 2018 came in at 157K, less than the forecast of 190K.
- Today, the German Factory Orders will be released for June 2018, which is forecasted to decline 0.2% (MoM).
EURUSD Technical Analysis
The Euro failed to break the 1.1745 resistance once again and declined against the US Dollar. The EUR/USD pair fell sharply and broke the 1.1650, 1.1640 and 1.1620 support levels.
Looking at the 4-hours chart, the pair was rejected from the 1.1745 resistance area. It declined below 1.1640 and settled below the 100 simple moving average (red, 4-hours).
There was also a break below a key bullish trend line with support at 1.1645, which opened the doors for more losses. The pair also cleared the last swing low of 1.1600 and broke the 1.236 Fib extension level of the last wave from the 1.1620 low to 1.1745 high.
Therefore, there are high chances of more slides towards the next key support at 1.1540 in the near term. Moreover, the 1.618 Fib extension level of the last wave from the 1.1620 low to 1.1745 high may well be tested.
On the upside, the broken supports at 1.1600, 1.1620 and 1.1640 are likely to act as resistances if the pair corrects higher.
Recently in the US, the nonfarm payrolls report for July 2018 was released by the US Department of Labor. The market was looking for a rise of 190K jobs in July 2018.
However, the actual result was disappointing as total nonfarm payroll employment rose by 157K in July. On the other hand, the unemployment rate declined from 4% to 3.9%, and the last NFP reading was revised up from 213K to 248K.
The report added that:
In July, the unemployment rate edged down by 0.1 percentage point to 3.9 percent, following an increase in June. The number of unemployed persons declined by 284,000 to 6.3 million in July. Both measures were down over the year, by 0.4 percentage point and 676,000, respectively.
Overall, the US Dollar gained after the release and pairs like EUR/USD and GBP/USD came under pressure before closing the last week.
Economic Releases to Watch Today
- German Factory Orders for June 2018 (MoM) – Forecast -0.2%, versus +2.6% previous.
- Euro Zone Sentix Investor Confidence for August 2018 – Forecast 11.6, versus 12.1 previous.