EUR/USD Recovery Facing Many Key Hurdles05 August, 2019 by Aayush Jindal in Market Analysis
- The Euro started an upside correction from the 1.1027 swing low against the US Dollar.
- A major bearish trend line is forming with resistance near 1.1135 on the 4-hours chart of EUR/USD.
- The US nonfarm payrolls in July came in at 164K, down from the last revised 193K.
- The US ISM Non-Manufacturing Index in July 2019 could increase from 55.1 to 55.5.
EURUSD Technical Analysis
The Euro declined heavily below the 1.1200 and 1.1120 support levels against the US Dollar. The EUR/USD pair traded as low as 1.1027 and recently started an upside correction.
Looking at the 4-hours chart, the pair recovered above the 1.1050 and 1.1080 resistance levels. Moreover, there was a break above the 23.6% Fib retracement level of the decline from the 1.1280 high to 1.1027 swing low.
The pair even climbed above the 1.1100 level, but it is still well below the 100 simple moving average (red, 4-hours) and 200 simple moving average (green, 4-hours).
More importantly, there is a major bearish trend line forming with resistance near 1.1135 on the same chart. If there is an upside break above the trend line, the pair could test the 1.1150 resistance level.
The 50% Fib retracement level of the decline from the 1.1280 high to 1.1027 swing low is also near the 1.1153 level. Therefore, the pair might face a strong selling interest near the 1.1150 area. Any further gains could lead the pair towards the 1.1200 level.
On the downside, an immediate support is near 1.1080 level, below which the pair is likely to resume its decline towards the 1.1050 and 1.1030 support levels.
Fundamentally, the US nonfarm payrolls report for July 2019 was released by the US Department of Labor. The market was looking for an increase of 164K, compared with the last 224K.
The actual result was similar to the forecast, as the total nonfarm payroll employment rose by 164K in July. However, the last reading was revised down from 224K to 164K.
The report added that:
The unemployment rate held at 3.7 percent in July, and the number of unemployed persons was little changed at 6.1 million.
Overall, the US Dollar is correcting lower, but EUR/USD and GBP/USD are facing many key hurdles on the upside.
Economic Releases to Watch Today
- Germany’s Services PMI for July 2019 – Forecast 55.4, versus 55.4 previous.
- Euro Zone Services PMI for July 2019 – Forecast 53.3, versus 53.3 previous.
- UK Services PMI for July 2019 – Forecast 50.2, versus 50.2 previous.
- US Services PMI for July 2019 – Forecast 52.2, versus 52.2 previous.
- US ISM Non-Manufacturing Index for July 2019 – Forecast 55.5, versus 55.1 previous.