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EUR/USD Could Resume Increase If It Holds This Support

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Aayush Jindal

Key Highlights

  • EUR/USD tested 1.0090 before it corrected lower.
  • A major bullish trend line is forming with support at 0.9820 on the 4-hours chart.
  • GBP/USD gained pace above 1.1500, and gold price slowly moved lower.
  • The Euro Zone GDP could grow 0.2% in Q3 2022 (Preliminary) (QoQ), down from 0.8%.

EUR/USD Technical Analysis

The Euro started a steady increase above the 0.9900 resistance against the US Dollar. EUR/USD cleared the 1.0000 resistance and extended gains.

Looking at the 4-hours chart, the pair even broke the 1.0050 resistance level and settled well above the 100 simple moving average (red, 4-hours) plus the 200 simple moving average (green, 4-hours).

A high was formed near 1.0091 before there was a downside correction. The pair declined below the 1.0050 and 1.0020 support levels. The bears pushed the pair below the 23.6% Fib retracement level of the upward move from the 0.9704 swing low to 1.0093 high.

An initial support is near the 0.9890 level. It is near the 50% Fib retracement level of the upward move from the 0.9704 swing low to 1.0093 high.

The next major support is near the 0.9840 zone and the 100 simple moving average (red, 4-hours). There is also a major bullish trend line forming with support at 0.9820 on the same chart.

A downside break below the 0.9840 zone could push the pair into a bearish zone. In the stated case, it could decline towards the 0.9750 support. On the upside, EUR/USD is facing a major resistance near the 1.0020 zone.

The next major resistance may perhaps be near 1.0050. Any more gains could set the pace for a move towards the 1.0120 level, above which it could even test 1.0180.

Looking at GBP/USD, the pair gained pace for a move above the 1.1500 resistance zone and there are chances of more upsides.

Economic Releases

  • German Retail Sales for Sep 2022 (MoM) – Forecast -0.3%, versus -1.3% previous.
  • German Retail Sales for Sep 2022 (YoY) – Forecast -0.4%, versus -4.3% previous.
  • Euro Zone GDP for Q3 2022 (Preliminary) (QoQ) - Forecast 0.2%, versus 0.8% previous.
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