EUR/USD Forecast – Euro Runs Into Crucial Resistance Vs US Dollar

EUR/USD Forecast – Euro Runs Into Crucial Resistance Vs US Dollar

  • – The Euro formed a support base near 1.2150 and recovered sharply against the US Dollar.
  • – There was a break above a major bearish trend line with resistance at 1.2200 on the hourly chart of EUR/USD.
  • – Recently in the US, the Manufacturing Purchasing Managers Index (PMI) for Feb 2018 was released by the Markit Economics.
  • – The outcome was below the forecast of 55.9 as the PMI posted a decline from the last reading of 55.9 to 55.3.

US Manufacturing PMI

Recently in the US, the Manufacturing Purchasing Managers Index (PMI) for Feb 2018 was released by the Markit Economics. The market was looking for the PMI to remain stable around the 55.9 level.

 

The actual result was below the forecast of 55.9 as the PMI posted a decline from the last reading of 55.9 to 55.3. The report added that:

 

February survey data signalled one of the strongest improvements in the health of the U.S. manufacturing sector seen over the past three years, led by a sharp expansion in new orders. Meanwhile, inflationary pressures intensified with rates of both input and output price inflation reaching multi-year highs.

 

However, the EUR/USD pair gained traction and started an upside move above the 1.2200 level after the release.

 

EUR/USD Technical Analysis

The Euro after a major decline found support around the 1.2150 level against the US Dollar. The EUR/USD formed a base around 1.2150, started an upside move, and broke the 1.2200 resistance to settle above the 100 hourly simple moving average.

 

EUR/USD Technical Analysis Euro US Dollar

 

The pair also broke the 50% Fib retracement level of the last decline from the 1.2346 high to 1.2154 low. Moreover, there was a break above a major bearish trend line with resistance at 1.2200 on the hourly chart of EUR/USD.

 

The pair is now trading in a bullish zone and above 1.2250. However, it is facing a major resistance zone near 1.2280. There could be a minor downside reaction, but the pair remains supported above 1.2250 and the 100 hourly SMA.

 

Overall, the pair may continue to move higher, and it could break the 1.2280 resistance level. It seems like the pair may even break the 1.2300 level to retest the last swing high near 1.2346.


Also published on Medium.

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