EUR/USD analysis: modestly higher short term, but 1.1820/30 key

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1747

The EUR/USD pair managed to advance modestly this Monday, as half a holiday in the US, with Wall Street working, but pretty much everything else closed in the country, keeping majors within limited ranges. The pair ended the day marginally higher around 1.1750, merely 20 pips above Friday's close, with trading also restricted ahead of first-tier events that will take place later this week, starting this Tuesday, with the possibility of Catalonia declaring its independence from Spain, something the markets fear, but are still underestimating. Mid week, the Fed will release the Minutes of its latest meeting, while on Friday, it will offer final September inflation figures.

Data released this Monday in Europe was EUR-supportive, as German industrial production rose by more than expected in August, posting its biggest monthly increase in more than six years, up by 2.6% in the month, bouncing from July's 0.1% decline. When compared to a year earlier, production rose by 4.7%, from 4.2% in July. Also, the EU Sentix investor confidence jumped to 29.7 in October, its highest in 10 years, beating expectations of 28.5.

From a technical point of view, the pair has gained some bullish traction in the short term, but would take the price to settle above the 1.1820/30 strong static resistance area to see the pair actually turning positive and bulls daring for more. In the meantime, the 4 hours chart shows that the price advanced above 1.1730, which in the mentioned chart presents its 20 SMA, while the level also represents the 23.6% retracement of the April/September rally. Indicators in the mentioned chart head modestly higher after entering positive territory, supporting some additional gains up to the 1.1780 region, the immediate resistance. Below the mentioned Fibonacci support, on the other hand, the risk turns towards the downside, with scope then for a retest of the 1.1660 price zone.

Support levels: 1.1730 1.1695 1.1660

Resistance levels: 1.1780 1.1825 1.1850

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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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