EUR/USD Remains Supported Near 1.170024 September, 2018 by Aayush Jindal in Market Analysis
- The Euro made a nice upside move and traded above 1.1700 level against the US Dollar.
- There is a key bullish trend line in place with support near 1.1700 on the 4-hours chart of EUR/USD.
- The US Services PMI in Sep 2018 (Prelim) declined from 54.8 to 52.6.
- Today, the Chicago Fed National Activity Index (CFNAI) for August 2018 will be released, which is forecasted to decline from 0.13 to 0.02.
EURUSD Technical Analysis
This past week, the Euro climbed higher from the 1.1620 support against the US Dollar. The EUR/USD pair traded above 1.1700 and 1.1780 before starting a downside correction.
Looking at the 4-hours chart, the pair even spiked above the 1.1800 level and formed a high at 1.1802. Later, the pair started a downside correction and traded below the 1.1750 level and the 23.6% Fib retracement level of the last wave from the 1.1649 low to 1.1802 high.
However, there are many supports on the downside near the 1.1700-10 zone. There is also a key bullish trend line in place with support near 1.1700 on the same chart.
An intermediate support is the 50% Fib retracement level of the last wave from the 1.1649 low to 1.1802 high at 1.1726. Below the trend line, the pair could test the 1.1650 support and the 100 simple moving average (4-hours, red).
On the upside, a daily close above the 1.1800 level could ignite more gains in EUR/USD. The next resistance on the upside is near the 1.1840 level.
Fundamentally, the US Services Purchasing Managers Index (PMI) for Sep 2018 (Prelim) was released by Markit Economics this past Friday. The market was looking for a rise from the last reading of 54.8 to 55.0.
However, the result was disappointing as the Services PMI declined from 54.8 to 52.6, and the US Composite Output Index came in at 53.4 (17-month low), down from 54.7 in August.
Overall, the EUR/USD pair remains supported on dips near the 1.1700 level. Below this, there could be an extended correction to 1.1650. On the upside, a break above 1.1800 may push the pair towards 1.1840.