EUR/USD Forecast – Euro Back in Bullish Trend Vs US Dollar
- – The Euro after a sharp downside move towards the 1.1860 against the US Dollar found support.
- – There is a monster ascending channel forming with support at 1.1970 on the hourly chart of EUR/USD.
- – Recently in the Euro Zone, the Manufacturing Purchasing Managers Index (PMI) (Prelim) for Sep 2017 was released by the Markit Economics.
- – The outcome was above the forecast of 57.1, as there was a rise in the PMI from 57.4 to 58.2.
Euro Zone Manufacturing Purchasing Managers Index (PMI)
Recently in the Euro Zone, the Manufacturing Purchasing Managers Index (PMI) (Prelim) for Sep 2017 was released by the Markit Economics. The market was positioned for a decline in the PMI from the last reading of 57.4 to 57.1.
The actual result was above the forecast of 57.1, as there was a rise in the PMI from 57.4 to 58.2. Moreover, the Flash Eurozone PMI Composite Output Index surged to 56.7 from the last reading of 55.7, which is a 4-month high. Commenting on the same, the Chief Business Economist at IHS Markit, Chris Williamson, stated:
The eurozone economy ended the summer with a burst of activity, with the PMI signalling renewed impetus to already-impressive rates of growth of output, order books and employment during September.
The result was positive, and would continue to help EUR/USD to remain above the 1.1950 support area.
EUR/USD Technical Analysis
The Euro after a test of the 1.2034 level against the US Dollar made a sharp downside move. The EUR/USD pair traded below the 1.2020 support and broke a major bullish trend line at 1.1990 on the hourly chart along with the 100 hourly simple moving average.
It traded as low as 1.1860 from where it started a correction. The pair has recovered sharply and broke the 61.8% Fib retracement level of the last decline from the 1.2034 high to 1.1860 low. There is a monster ascending channel forming with support at 1.1970 on the hourly chart, which is acting as a trend catalyst.
On the upside, the most important resistance sits near 1.2000 and 1.2020. There is a chance of a reaction, but the overall trend is positive above 1.1970.
As long as the pair is above 1.1970, one may consider buying in the short term, looking for a break above 1.2020.
