(function() { var didInit = false; function initMunchkin() { if(didInit === false) { didInit = true; Munchkin.init('105-GAR-921'); } } var s = document.createElement('script'); s.type = 'text/javascript'; s.defer = true; s.src = '//munchkin.marketo.net/munchkin.js'; s.onreadystatechange = function() { if (this.readyState == 'complete' || this.readyState == 'loaded') { initMunchkin(); } }; s.onload = initMunchkin; document.getElementsByTagName('head')[0].appendChild(s); })(); (function(h,o,t,j,a,r){ h.hj=h.hj||function(){(h.hj.q=h.hj.q||[]).push(arguments)}; h._hjSettings={hjid:1422437,hjsv:6}; a=o.getElementsByTagName('head')[0]; r=o.createElement('script');r.defer=1; r.src=t+h._hjSettings.hjid+j+h._hjSettings.hjsv; a.appendChild(r); })(window,document,'https://static.hotjar.com/c/hotjar-','.js?sv=');

EUR/USD Showing Signs of Weakness Below 1.1300

Aayush Jindal

Aayush Jindal

Key Highlights

  • The Euro failed to break the 1.1325 resistanceand declined sharply against the US Dollar.
  • EUR/USD traded below a crucial bullish trendline with support at 1.1290 on the 4-hours chart.
  • The US Housing Starts in March 2019 decreased0.3% (MoM), whereas the forecast was +6.5%.
  • The US Existing Home Sales in March 2019 could dip2.3% (MoM), whereas the last was +11.8%.

EURUSD Technical Analysis

This past week, the Euro made a couple of attempts to break the 1.1325-1.1330 resistance against the US Dollar, but it failed. As a result, the EUR/USD pair started a strong decline below the 1.1300 support.

EURUSD Technical Analysis Euro US Dollar

Looking at the 4-hours chart, the pair topped near the1.1323 level and traded below the 1.1300 and 1.1280 support levels. Moreimportantly, the pair surpassed a crucial bullish trend line with support at1.1290.

There was also a break below the 100 simple moving average (4-hours,red), 200 simple moving average (4-hours, green), and the 50% Fib retracementlevel of the last major wave from the 1.1183 low to 1.1323 high.

Recently, the pair even dipped below the 1.1250 supportlevel and the 61.8% Fib retracement level of the last major wave from the1.1183 low to 1.1323 high.

On the downside, the main support is at 1.1215. If there isa break below the 1.1215 support, the pair is likely to revisit the 1.1180support area. On the upside, an initial resistance is at 1.1268, above whichthe pair is likely to test the 200 simple moving average (4-hours, green).

Only a successful close above 1.1300 could push EUR/USD backin a positive zone. It not, there is a risk of a downside extension below1.1215 and 1.1180 in the coming days.

Fundamentally, the US Housing Starts report for March 2019was released by the US Census Bureau. The market was looking for an increase of6.5% in March 2019, compared with the previous month.

The actual result was disappointing as there was a declineof 0.3% in the US Housing Starts. The last reading was also revised from -8.7%to -12.0%.

The report added that:

Privately‐owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,269,000.  This is 1.7 percent (±1.4 percent) below the revised February rate of 1,291,000 and is 7.8 percent (±1.9 percent) below the March 2018 rate of 1,377,000.

To sum up, both EUR/USD and GBP/USD are currently trading in a bearish zone, with a risk of more downsides in the near term.

Economic Releases to Watch Today

  • Chicago Fed National Activity Index for March2019 – Forecast -0.25, versus -0.29 previous.
  • US Existing Home Sales for March 2019 (MoM) -Forecast -2.3%, versus +11.8% previous.