EUR/USD Trimmed Gains, Could Revisit 1.130021 January, 2019 by Aayush Jindal in Market Analysis
- The Euro failed to hold the 1.1440 support and declined heavily against the US Dollar.
- There is a major bearish trend line formed with resistance at 1.1390 on the 4-hours chart of EUR/USD.
- The US Industrial Production in Dec 2018 increased 0.3% (MoM), more than the +0.2% forecast.
- The German Producer Price Index for Dec 2018 will be released today, which could decline 0.1% (MoM).
EURUSD Technical Analysis
After trading above the 1.1550 level, the Euro failed to clear the 1.1570 resistance against the US Dollar. The EUR/USD pair started a fresh decline and broke the 1.1500 and 1.1440 support levels.
Looking at the 4-hours chart, the pair even broke the 1.1400 support and the 61.8% Fib retracement level of the last wave from the 1.1305 low to 1.1569 high. There was even a close below the 1.1400 level and the 100 simple moving average (red, 4-hours).
It opened the doors for more losses and the pair dipped below the 1.1380 level and the 76.4% Fib retracement level of the last wave from the 1.1305 low to 1.1569 high.
This means there are high chances that EUR/USD could retest the 1.1305-1.1310 support area. On the upside, there are many hurdles for buyers near the 1.1400 and 1.1440 levels.
Besides, there is a major bearish trend line formed with resistance at 1.1390 on the same chart. Therefore, a close above the trend line, 1.1400, and the 100 simple moving average (red, 4-hours) is needed for a fresh upward move.
Fundamentally, the US Industrial Production for Dec 2018 was released recently. The market was looking for an increase of around 0.2% in the production compared with the previous month.
However, the actual result was better than the forecast as there was a 0.3% increase in the US Industrial Production. On the other hand, the last reading was revised down from +0.6% to +0.4%.
Overall, the EUR/USD pair remains at a risk of more losses, but GBP/USD remains well supported on the downside.
Economic Releases to Watch Today
- German Producer Price Index for Dec 2018 (MoM) – Forecast -0.1%, versus +0.1% previous.
- German Producer Price Index for Dec 2018 (YoY) – Forecast +3.2%, versus +3.3% previous.