EUR/USD Forecast – Can Euro Recover above 1.2020 Vs US Dollar?

EUR/USD Forecast – Can Euro Recover above 1.2020 Vs US Dollar?

  • – The Euro declined further this week and traded towards 1.1940 against the US Dollar.
  • – There was a break above a bearish trend line with resistance at 1.1980 on the hourly chart of EUR/USD.
  • – Recently in the US, the Services Purchasing Managers Index (PMI) for April 2018 was released by Markit Economics.
  • – The outcome was above the forecast of 54.4 as there was a rise in in the PMI from 54.4 to 54.6.

US Services PMI

Recently in the US, the Services Purchasing Managers Index (PMI) for April 2018 was released by Markit Economics. The market was looking for no change in the PMI from the last reading of 54.4 in April 2018.

 

The actual result was above the forecast of 54.4 as there was a rise in in the PMI from 54.4 to 54.6. There was a decent rise in new orders pace. The report added:

 

April survey data indicated a strong expansion in business activity across the U.S. service sector. However, although the rate of growth accelerated, it remained below the series’ long-run average. Meanwhile, the upturn in new business quickened to a sharp rate that was the fastest since March 2015.

 

The EUR/USD pair is currently correcting higher, but it is likely to face a strong resistance near the 1.2020 level in the near term.

 

EUR/USD Technical Analysis

The Euro was under a lot of pressure this week and declined below the 1.2000 support level against the US Dollar. The EUR/USD pair even declined below the 1.1960 support and settled well below the 100 hourly simple moving average.

 

EUR/USD Technical Analysis Euro US Dollar

 

The pair traded as low as 1.1937 before buyers appeared. At the moment, the pair is correcting higher and moved above the 1.1950 level. More importantly, there was a break above a bearish trend line with resistance at 1.1980 on the hourly chart of EUR/USD.

 

The pair also succeeded in moving past the 23.6% Fib retracement level of the last decline from the 1.2138 high to 1.1937 low. However, there are many barriers on the upside around the 1.2020 level for the Euro buyers.

 

If the pair continues to correct higher, it may face sellers near the 1.2020 level, 100 hourly SMA, and the 50% Fib retracement level of the last decline from the 1.2138 high to 1.1937 low at 1.2038.


Also published on Medium.

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