EUR/USD Likely To Face Hurdles Near 1.130015 July, 2019 by Aayush Jindal in Market Analysis
- The Euro started a decent rebound from 1.1200 against the US Dollar.
- EUR/USD is facing a significant resistance near 1.1300 and a bearish trend line on the 4-hours.
- The Euro Area Industrial Production in May 2019 increased 0.9% (MoM), better than the +0.2% market forecast.
- The NY Empire State Manufacturing Index in July 2019 might rise from -8.6 to 0.5.
EURUSD Technical Analysis
After a downside extension below 1.1250 support, the Euro found support near 1.1200 against the US Dollar. The EUR/USD pair started a decent rebound above 1.1220, but it is facing many hurdles on the upside.
Looking at the 4-hours chart, the pair traded as low as 1.1193 and later recovered above the 1.1220 and 1.1240 resistance levels. Besides, there was a break above a connecting bearish trend line at 1.1245.
It opened the doors for more gains above 1.1250 plus the 23.6% Fib retracement level of the slide from the 1.1412 high to 1.1193 low. However, the pair is now facing a significant resistance near 1.1300 and the 100 simple moving average (red, 4-hours).
Moreover, the 50% Fib retracement level of the slide from the 1.1412 high to 1.1193 low is also near the 1.1302 level. Finally, there is a key bearish trend line forming with current resistance near 1.1310 on the same chart.
Therefore, the 1.1300 and 1.1310 levels are likely to act as major hurdles for the bulls. If there is no upside break above 1.1300 or 1.1310, the pair could decline once again.
An immediate support is near the 1.1240 level, below which the pair could revisit the 1.1200 support area in the near term.
Fundamentally, the Euro Area Industrial Production for May 2019 was released by the Eurostat. The market was looking for a 0.2% rise in the production compared with the previous month.
The actual result was above the market forecast, as there was a 0.9% rise in the production. Moreover, the last month’s reading was revised up from -0.5% to -0.4%. Looking at the yearly change, there was a decrease of 0.5%, better than the market forecast of -1.6%.
The report added:
In the euro area in May 2019, compared with April 2019, production of non-durable consumer goods rose by 2.7%, durable consumer goods by 2.3%, capital goods by 1.3% and energy by 0.7%, while production of intermediate goods fell by 0.2%.
Overall, EUR/USD recovered nicely above 1.1250, but it is likely to struggle to continue above the 1.1300 resistance area in the coming sessions. Similarly, GBP/USD is approaching towards the key 1.2600-1.2620 resistance area.
Economic Releases to Watch Today
- Swiss PPI for June 2019 (YoY) – Forecast -0.9%, versus -0.8% previous.
- NY Empire State Manufacturing Index for July 2019 – Forecast 0.5, versus -8.6 previous.