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Aayush Jindal

Key Highlights

  • EUR/USD extended decline and tested the 1.0765 level.
  • A connecting bearish trend line is forming with resistance near 1.0850 on the 4-hour chart.
  • GBP/USD is now trading below the 1.2650 resistance.
  • USD/JPY is eyeing more gains above the 146.55 resistance.

EUR/USD Technical Analysis

The Euro remained in a bearish zone below the 1.1000 level against the US Dollar. EUR/USD extended decline and traded below the 1.0920 support.

Looking at the 4-hour chart, the pair settled below the 1.0850 level, the 100 simple moving average (red, 4 hours) and the 200 simple moving average (green, 4 hours).

The pair tested the 1.0765 zone. A low is formed near 1.0766 and the pair is now consolidating losses. It is trading just above the 23.6% Fib retracement level of the downward move from the 1.0930 swing high to the 1.07616 low.

On the upside, an initial resistance is near the 1.0830 level. There is also a connecting bearish trend line forming with resistance near 1.0850 on the same chart.

The trend line is near the 50% Fib retracement level of the downward move from the 1.0930 swing high to the 1.07616 low. A close above 1.0850 could start a decent increase. In the stated case, the pair could rise toward the 1.0920 level. Any more gains could start a fresh increase toward the 1.0980 level.

If not, the pair might react to the downside toward the 1.0765 support. The next key support is seen near the 1.0740 level.

If there is a move below 1.0740, the pair could dive toward 1.0650. Any more gains might open the doors for a test of 1.0500.

Looking at GBP/USD, the pair is still trading in a bearish zone and there is a risk of more downsides below the 1.2600 level.

Economic Releases

  • Dallas Fed Manufacturing Business Index for August 2023 – Forecast -21.6, versus -20.0 previous.