EUR/USD – Euro Remains Supported Above 1.1100 Vs US Dollar
Aayush Jindal
Key Highlights
The Euro traded to a new monthly high at 1.1268 against the US Dollar before starting a correction.
There is a flag pattern with support at 1.1145 formed on the 4-hours chart of the EUR/USD pair.
The US Gross Domestic Product for Q1 2017 (Preliminary) released on the last Friday by the US Bureau of Economic Analysis posted a growth of 1.2%.
Today, the Euro Zone will see a low-risk event, as the M3 Money Support for April 2017 will be released by the European Central Bank with forecast as +5.2% (YoY).
EUR/USD Technical Analysis
The Euro enjoyed a decent run above 1.1220 against the US Dollar, and traded to a new monthly high at 1.1268. Later, the EUR/USD pair started a correction, and may test 1.1145 or 1.1120.The 4-hours chart suggests that the pair is following a flag pattern with trend line support at 1.1145. The resistance on the upside is at 1.1220, and support is near 1.1140.The 61.8% Fib retracement level of the last wave from the 1.1075 low to 1.1268 high is at 1.1149, which might also act as a support.To sum it up, there are many supports on the downside starting with 1.1145 if the pair corrects further lower.
US Gross Domestic Product
This past Friday, the US saw a major economic release, as the US Gross Domestic Product for Q1 2017 (Preliminary) was reported by the US Bureau of Economic Analysis.The market was positioned for an increase of 0.9% in the GDP in Q1 2017 (Annualized, Preliminary). However, the result was above the forecast, as the US GDP grew by 1.2%. The report highlighted that “Real gross domestic income (GDI) increased 0.9 percent in the first quarter, in contrast to a decrease of 1.4 percent (revised) in the fourth. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 1.0 percent in the first quarter, compared with an increase of 0.3 percent in the fourth quarter”.Looking at the Real Personal Consumption Expenditure for Q1 2017 (Preliminary), there was a rise of 2.1%, as per the report published by the Bureau of Economic Analysis, Department of Commerce. The forecast was +2%.The Euro may move down a few pips towards 1.1120 or 1.1100 against the US Dollar, but likely to find support.
The 4-hours chart suggests that the pair is following a flag pattern with trend line support at 1.1145. The resistance on the upside is at 1.1220, and support is near 1.1140.The 61.8% Fib retracement level of the last wave from the 1.1075 low to 1.1268 high is at 1.1149, which might also act as a support.To sum it up, there are many supports on the downside starting with 1.1145 if the pair corrects further lower.
The market was positioned for an increase of 0.9% in the GDP in Q1 2017 (Annualized, Preliminary). However, the result was above the forecast, as the US GDP grew by 1.2%. The report highlighted that “Real gross domestic income (GDI) increased 0.9 percent in the first quarter, in contrast to a decrease of 1.4 percent (revised) in the fourth. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 1.0 percent in the first quarter, compared with an increase of 0.3 percent in the fourth quarter”.Looking at the Real Personal Consumption Expenditure for Q1 2017 (Preliminary), there was a rise of 2.1%, as per the report published by the Bureau of Economic Analysis, Department of Commerce. The forecast was +2%.The Euro may move down a few pips towards 1.1120 or 1.1100 against the US Dollar, but likely to find support.