EUR/USD daily overview
Updated
The Euro was appreciating steadily against the Greenback on Friday morning. The pair, however, was unable to reach the combined resistance of the 55-, 100– and 200-hour SMAs, as it started falling substantially mid-session. The rate plunged 70 pips within three hours prior to consolidating around 1.2280.
As apparent on the chart, the Euro was testing the bottom boundary of a six-month channel up and the weekly S1 on Monday morning. The pair might still edge slightly lower down to the 38.20% Fibonacci line at 1.2236 prior to bouncing off this long-term pattern. It is expected that the pair hinders near 1.2390 for a few hours prior to targeting the 1.2340 area.
Even though no data releases are scheduled for today, political events in the G20 summit might cause some turbulence during the following two days.
As apparent on the chart, the Euro was testing the bottom boundary of a six-month channel up and the weekly S1 on Monday morning. The pair might still edge slightly lower down to the 38.20% Fibonacci line at 1.2236 prior to bouncing off this long-term pattern. It is expected that the pair hinders near 1.2390 for a few hours prior to targeting the 1.2340 area.
Even though no data releases are scheduled for today, political events in the G20 summit might cause some turbulence during the following two days.
Comment
The Euro rallied against the US Dollar on Monday, thus closing the session with a 55-pip gain. The most notable surge was apparent mid-session when a successful Brexit agreement gave additional bullish push.
The rate moved above the 200– and 100-hour SMAs and was therefore located near the 1.2335 area which has provided strong resistance during the previous weeks.
This breakout might be interpreted as a signal for a continuous advance north. However, the aforementioned resistance area could introduce some changes to this assumption and thus force the Euro lower down to the weekly PP and the 55-hour SMA circa 1.2310.
The main driver of volatility in this session should be G20 meetings. In case no surprises occur, the market is likely to consolidate prior to Fed statement tomorrow.
Comment
The US Dollar grew stronger on Tuesday, thus pushing the EUR/USD exchange rate considerably lower. The pair started to edge south mid-session and consequently plunged 110 pips within a couple of hours, thus breaching all three moving averages and the senior channel along the way.
This strong downside momentum was caused by the dismal ZEW survey which showed that German confidence fell to an unexpected low of 5.1 in February. The first part of the day should mark a move closer to 1.2320 where several important resistance levels are located; however, it is unlikely to be surpassed.
The Fed is the main focus today. An interest hike is seemed to be priced in the market, presumably having a positive impact on the pair. Conversely, improved rate forecasts are likely to pressure the rate lower.
Comment
The Euro spent most of Wednesday in a positive note, thus approaching the combined resistance of the 55– and 100-hour SMAs at 1.23.
Strong upside risks started to prevail in the market late in the evening when the FOMC announced a 0.25% increase in its benchmark rate. Volatility was introduced in both directions; however, Euro bulls eventually took the dominant hand in response to a decrease in rate hike projections. The pair shot up 48 pips in one hour and subsequently reached a one-week high of 1.2370.
It is expected that the given upward momentum allays in this session, thus allowing for a minor decline. This likely fall should not exceed 1.23, as this level is supported by the 55– and 100-hour SMAs. In the meantime, gains should be capped near 1.2440.
Comment
After reaching this week’s high of 1.2380 early on Thursday, EUR/JPY started a new decline.
This fall was caused by disappointing Markit PMI data for the Euro zone and Germany. As a result, the pair dashed through the 200-hour SMA and the weekly PP. Some bullish pressure was introduced late in the evening when the US Dollar weakened in response to new tariffs on China imposed by the Trump administration.
The Euro found support at the 55– and 100-hour SMAs circa 1.23 and was trading near 1.2335 at the time of this analysis. From technical point of view, the pair should push for the trend-line and the 23.60% Fibo at 1.2360. It is likely that the pair remains stranded between this line and the SMAs prior to US fundamentals.
The general tendency is likely to remain upwards closer to 1.24.
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