Aayush Jindal
Key Highlights
- EUR/USD started an upside correction from the 1.1700 region.
- It broke a key bearish trend line with resistance near 1.1745 on the 4-hours chart.
- GBP/USD managed to stay above the 1.3800 support zone.
- USD/JPY declined below the 109.80 support level.
EUR/USD Technical Analysis
The Euro extended its decline below 1.1750 against the US Dollar. EUR/USD traded as low as 1.1705 before it started an upside correction.
Looking at the 4-hours chart, the pair recovered above the 1.1740 and 1.1750 resistance levels. There was also a break above a key bearish trend line with resistance near 1.1745.
The pair surpassed the 23.6% Fib retracement level of the key decline from the 1.1908 swing high to 1.1705 low. However, it is now facing a strong resistance near the 1.1800 zone and the 100 simple moving average (red, 4-hours).
The 50% Fib retracement level of the key decline from the 1.1908 swing high to 1.1705 low is also near 1.1807. The next key resistance could be 1.1815 and the 200 simple moving average (green, 4-hours).
To move into a positive zone, EUR/USD must break the 1.1800 and 1.1815 resistance levels. In the stated case, it could recover towards the 1.1900 resistance.
If not, there is a risk of a fresh decline from 1.1800. The key support is now near 1.1750, below which the pair is likely to visit 1.1700.
Looking at GBP/USD, the pair is still above the 1.3800 support zone, but it is facing a strong resistance near 1.3900 and 1.3920.
Economic Releases
- NY Empire State Manufacturing Index for August 2021 – Forecast 35, versus 43 previous.
