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EUR/USD Regains Strength As Dollar Starts Downside Correction

Key Highlights

  • EUR/USD rallied above the 1.0880 and 1.0920 levels.
  • A connecting bullish trend line is forming with support near 1.0810 on the 4-hour chart.
  • GBP/USD also climbed higher above the 1.2450 resistance.
  • USD/JPY declined heavily below the 150.00 support.


EUR/USD Technical Analysis

The Euro started a strong increase above the 1.0800 level against the US dollar. EUR/USD broke many hurdles near 1.0850 to move into a positive zone.

Looking at the 4-hour chart, the pair settled above the 1.0850 level, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours). The upward move was such that the pair surged above the 1.0920 level.

A new multi-week high was formed near 1.0957 and the pair is now consolidating gains. On the upside, the pair is facing resistance near the 1.0940 level.

If there is a fresh increase, the pair could surpass the 1.0940 level. The next key resistance is near the 1.0980 level. The main resistance is now near the 1.1000 level. A close above the 1.1000 zone could open the doors for more upsides. The next stop for the bulls might be 1.1075.

If not, the pair might start a downside correction below the 1.0900 support. The first major support is now forming near the 1.0865 level. The next key support sits at 1.0820.

There is also a major bullish trend line forming with support near 1.0810 on the same chart, below which the pair could test the 1.0750 pivot level in the near term. Any more losses may perhaps open the doors for a move toward the 100 simple moving average (red, 4 hours) at 1.0700.

Looking at GBP/USD, the pair gained pace above the 1.2450 resistance and might continue to rise toward 1.2550 in the near term.

Economic Releases

  • Canadian Consumer Price Index for Oct 2023 (MoM) – Forecast +0.1%, versus -0.1% previous.
  • Canadian Consumer Price Index for Oct 2023 (YoY) – Forecast +3.2%, versus +3.8% previous.