EUR/USD analysis: holding on to gains, but 1.0820 caps

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0816

Following a consolidative stage that extended during the first half of the day, the EUR/USD extended its monthly advance up to 1.824 after the US opening, as the dollar got dragged lower by poor US data and falling equities. The EUR/USD pair however, was unable to hold on to gains, and closed the day pretty much flat a few pips above the 1.0800 level. Risk aversion was again the main theme leading the markets, as following Wednesday's equities slump, a terrorist incident took place near the UK Parliament with at least two people dead.

In the data front, the EU released a minor report, the its current account for January, which recorded a surplus of €24.1 billion, below market's expectations, and December result, this last revised lower to €30.8B. In the US, sales of existing homes fell by 3.7% in February, at a 5.48 million seasonally adjusted annual rate, below previous 5.69M and expectations of 5.58M. Also, Fed's Kaplan hit the wires, reaffirming that the US Central Bank would need just two more rate hikes this year, and that policymakers will continue trimming its massive balance sheet gradually.

Despite still contained by a major Fibonacci resistance at 1.0820, the 50% retracement of the post-US election slide, the pair retains its bullish bias, at least technically, given that in the 4 hours chart, technical indicators have resumed their advances within positive territory after approaching their mid-lines, whilst 20 SMA maintains a sharp bullish slope below the current level. The pair peaked at 1.0828 last Friday, the level to surpass to confirm additional gains up to 1.0873, December monthly high. As long as the price holds above the 1.0700 region, bulls will remain in control of the pair.

Support levels: 1.0765 1.0730 1.0700

Resistance levels: 1.0830 1.0870 1.0910

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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