EURUSD – Is It Right Time To Buy Euro?
- Euro recovered well recently against the US Dollar, and broke a major resistance area of 1.1060.
- There is a descending channel pattern formed on the daily chart of EURUSD, which may act as a reason for the next move.
- The German Retail Sales released by the Statistisches Bundesamt Deutschland today posted a decline of 0.1% in June 2016, compared with the forecast of no change.
German Retail Sales
Earlier during the European session, the German Retail Sales, which is a measure of changes in sales of the German retail sector was released by the Statistisches Bundesamt Deutschland.
The forecast was slated for no change in sales in June 2016, compared with the previous month. However, the result was disappointing, as the sales declined by 0.1% in June 2016.
When we look at the yearly change, then the German Retail Sales grew 2.7%, which was a lot higher compared with the forecast of 1.2%. Moreover, the report added that “Compared with the previous year, turnover in retail trade was in the first six months 2016 in real terms 2.3% and in nominal terms 2.4% larger than in the corresponding period of the previous year.”
Overall, the Euro gained traction after the release, but was seen struggling around a major resistance area of 1.1120.
EURUSD Pair Analysis
The EURUSD pair after tumbling towards the 1.0900 against the US Dollar found bids and recovered. However, the upside was contained by the 200-day simple moving average.
There is also a descending channel pattern formed on the daily chart of EUR/USD. The channel resistance area is positioned with the 200-day SMA, and both combined acting as a major barrier for further gains in EUR/USD.
Moreover, the 38.2% Fib retracement level of the last drop from the 1.1426 high to 1.0917 low is also presenting offers to the bulls.
No doubt, the last few daily candles are pretty bullish. So, if there is a break above the channel resistance, then one may consider a buy trade with a tight stop.
