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EURUSD Facing Crucial Support Test

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Aayush Jindal

Key Highlights

  • The Euro failed to move above the 1.1850 resistance against the US Dollar and moved down.
  • EUR/USD is now approaching a major support area around 1.1710, which must hold declines.
  • Japan’s Adjusted Merchandise Trade Balance in Nov 2017 came in at ¥364.1B, better than the forecast of ¥342.4B.
  • Today, the Euro Zone CPI for Nov 2017 will be released (Forecast +1.5% vs +1.5% previous, YoY), which could have a huge impact on EUR/USD.

EURUSD Technical Analysis

There were a few swing moves in the Euro this past week above 1.1800 against the US Dollar. At the end, EUR/USD failed to hold gains above 1.1820 and declined.

EURUSD Technical Analysis Euro US Dollar

The US industrial production in Nov 2017 increased by +0.2% (MoM), which was less than the forecast of +0.3%. However, the EUR/USD pair failed to gain traction and started a downside move below the 1.1800.The pair broke the 1.1780 support area and even settled below the 50% fib retracement level of the last wave from the 1.1716 low to 1.1862 high. More importantly, the pair broke the 1.1750 support and the 200 simple moving average (green, 4-hour). Later, it recovered a few pips, but struggling to move above 1.1780.On the downside, the pair is approaching a major support area near 1.1710, which should hold declines in the short term. It seems like there is an expanding triangle forming with resistance at 1.1820 on the 4-hour chart.As long as the pair is below 1.1820 and the 100 simple moving average (red, 4-hour), it might continue to struggle. Today, the Euro Zone will see the release of the CPI figures of Nov 2017. It is forecasted to increase by 1.5% (YoY), similar to the last reading.Any major deviation from the +1.5% increase could ignite swing moves in EUR/USD either toward 1.1710 or 1.1820.

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