Technical Bias: Neutral
Key Takeaways
- Euro continued its decline against the US dollar and likely heading towards the previously mentioned weekly target of 1.3020.
- A short-term correction might find sellers for another low in the coming days.
- EURUSD support seen at 1.3100 and resistance ahead at 1.3180.
The Euro continued to drop against the US dollar and failed to close the last week gap, which suggests that more downside is possible in the near term.
Technical Analysis
There is a monster triangle forming on the 4 hour chart for the EURUSD pair, which is likely to break soon. The pair is currently testing the triangle support trend line, and might bounce a bit from the current levels which can be seen as a selling opportunity. This past week the EURUSD pair climbed from the 1.3150 low, but failed to break the 50% Fibonacci retracement level of the last drop from the 1.3297 high to 1.3150 low. The most important thing was that the mentioned level also coincided with the triangle resistance area. The pair is now trading below the 1.3150 low and likely heading towards the last week’s weekly possible target of 1.3020. The pair might bounce from the current levels, but might find sellers around the 1.3180 level. The most critical resistance can be seen around the 1.3230 level, which is the gap close level.
On the downside, initial support is around the 1.3100 level, followed by the 1.3080 swing area. It would be interesting to see how the pair reacts around the mentioned support area if reached.
German GDP
Today during the London session, the German Gross Domestic Product (GDP) will be published, which is expected to register a decrease of 0.2%. If the outcome exceeds the expectation, then the Euro might find bids in the short term.
Overall, selling rallies still remains an attractive option until the pair is trading below the 1.3230 level.
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