EUR/USD In Corrective Decrease, 1.1100 Could Be Savior

Key Highlights

  • EUR/USD started a major downside correction from the 1.1423 high.
  • A major declining channel is forming with resistance near 1.1230 on the 4-hours chart.
  • GBP/USD declined below the main 1.2500 support level and trimmed most gains.
  • The Euro Zone Consumer Confidence could improve from -18.8 to -15.0 in June 2020 (Prelim).

 

EUR/USD Technical Analysis

This month, the Euro gained pace above the 1.1350 resistance against the US Dollar. EUR/USD traded as high as 1.1423 and recently started a major downside correction below 1.1300.

Looking at the 4-hours chart, the pair broke a couple of key supports near 1.1300 and 1.1250 to move into a short term bearish zone. Besides, there was a break below the 23.6% Fib retracement level of the upward move from the 1.0870 low to 1.1423 high.

It seems like there is a major declining channel forming with resistance near 1.1230 on the same chart. It is currently trading below the 100 simple moving average (red, 4-hours) and an immediate support is near the 1.1145 level.

The 50% Fib retracement level of the upward move from the 1.0870 low to 1.1423 high might provide support. The main support is near the 1.1100 and 1.1080 levels, below which there is a risk of more downsides.

Conversely, the pair might start a fresh increase if it breaks the channel resistance and 1.1250. The next set of resistance is near the 1.1320 level.

Overall, EUR/USD is approaching key supports and it might bounce back from 1.1100. Conversely, GBP/USD trimmed most its gains and broke the main 1.2500 support zone.

Upcoming Economic Releases

  • Chicago Fed National Activity Index for May 2020 – Forecast -15.2, versus -16.74 previous.
  • US Existing Home Sales for May 2020 (MoM) - Forecast -2.3%, versus -17.8% previous.
  • Euro Zone Consumer Confidence June 2020 (Preliminary) – Forecast -15.0, versus -18.8 previous.