EUR/USD Analysis: failure at key resistance opens door for a leg lower

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1305

German inflation rose by less-than-anticipated in February.
US unemployment claims disappointed, housing data up next.

The EUR/USD pair topped at 1.1338 by the end of the American session Wednesday, falling to 1.1295 today, as risk aversion took over the London session, following news that China is considering delaying the Trump-Xi meeting to at least April. Additional pressure for the common currency came from German inflation, which rose by less-than-expected in February, up by 0.4% MoM and by 1.5% YoY. Ahead of Wall Street's opening, the US unveiled weekly unemployment claims, up to 229K for the week ended March 8, sending the greenback lower across the board, particularly considering equities are bouncing after the initial shock post-trad- war headlines. Still pending of release in the US, are January New Home Sales, seen down by 0.9%.

Still, the bounce was quite shallow, and the pair remains at the lower end of its daily range, barely holding above the 50% retracement of its latest daily slump. Quite relevant, as the pair faltered Tuesday around the 61.8% retracement of the same decline. The 4 hours chart shows that technical indicators are easing from overbought levels, while the 20 SMA maintains its bullish slope around 1.1280. It also shows that, after battling around the 100 SMA, the pair is now extending below the indicator, another sign that the next move could be lower. Chances of a bearish extension will be larger on a break below 1.1295, the daily low. Te mentioned 61.8% retracement offers an immediate static resistance at 1.1330.

Support levels: 1.1295 1.1260 1.1220

Resistance levels: 1.1330 1.1375 1.1410

View Live chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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