EURUSD Facing Important Resistance Zone

Key Highlights

• Euro after trading down towards the 1.1060 area against the US Dollar found support, and currently attempting to correct higher.

• EURUSD is facing an important resistance area near the 100 hourly simple moving average, which may ignite another downside move.

• There is also a critical bearish trend line formed on the hourly chart, which is positioned with the 100 SMA.

• Today, the German Manufacturing Purchasing Managers Index (PMI) will be released by the Markit economics, which is forecasted to decline from 52.3 to 52.0 in February 2016.

EURUSD Technical Analysis

The Euro was under a lot of pressure against the US Dollar this past week, as it fell to trade below the 1.1100 support area. The EURUSD pair traded as low as 1.1065 where it found buyers, and managed to hold more losses.

The EURUSD pair is currently attempting to correct higher, but facing a major resistance area. There is a confluence area formed of the 100 hourly simple moving average and a bearish trend line.

So, we can say that a major resistance for more gains is around 1.1120-40 area. A break above it may open the doors for more upsides in the near term.

German Manufacturing Purchasing Managers Index

Today, there are a couple of economic releases in the Euro Zone, including the German Manufacturing Purchasing Managers Index. It captures business conditions in the manufacturing sector and will be reported by the Markit economics.

The forecast is slated for a minor decline from the last reading of 52.3 to 52.0 in February 2016 (preliminary value). Similarly, the German Services Purchasing Managers Index will be released, which is also forecasted to decline from 55.0 to 54.7 in Feb 2016. If the PMI’s decline more than the forecast, then there is a chance of the EURUSD trading down in the short term.