EUR/USD Could Gain Momentum If It Clears 1.2200

Key Highlights

  • EUR/USD remained stable above 1.2050 and it recovered above 1.2120.
  • It is facing a strong resistance near 1.2200 on the 4-hours chart.
  • GBP/USD broke the 1.3700 resistance, but it struggled to continue above 1.3750.
  • Gold price is still well below $1,900, and oil price is correcting gains from $53.50.

 

EUR/USD Technical Analysis

After a steady decline, the Euro found support near the 1.2050 zone against the US Dollar. EUR/USD started a decent recovery from the 1.2053 low and it climbed above 1.2100.

Looking at the 4-hours chart, the pair cleared a major resistance near 1.2120 and a connecting bearish trend line. There was also a break above the 23.6% Fib retracement level of the downward move from the 1.2349 high to 1.2053 low.

It even climbed above 1.2150, and tested a confluence resistance near 1.2180 and the 200 simple moving average (green, 4-hours). There is also a major resistance forming near 1.2200 and the 100 simple moving average (red, 4-hours).

The 50% Fib retracement level of the downward move from the 1.2349 high to 1.2053 low is also at 1.2201. Therefore, a clear break and close above 1.2200 could open the doors for a steady increase towards 1.2250 or 1.2300.

Conversely, EUR/USD could fail to clear the 1.2200 resistance and started another decline. On the downside, the 1.2120 is a decent support. If there are more downsides, the pair could revisit the 1.2050 support zone.

Looking at GBP/USD, the pair broke the 1.3700 resistance, but it lacked momentum above 1.3750. Besides, USD/JPY is still struggling to clear the 104.00 and 104.20 resistance levels.

Economic Releases

  • German IFO Business Climate Index Jan 2020 – Forecast 92.0, versus 92.1 previous.
  • German IFO Current Assessment Index Jan 2020 - Forecast 90.7, versus 91.3 previous.
  • German IFO Expectations Index Jan 2020 – Forecast 93.2, versus 92.8 previous.