Home Forex Analysis And Forecasts EURUSD Above 1.3020 Would Make Case For Larger Correction

EURUSD Above 1.3020 Would Make Case For Larger Correction

Key Takeaways

  • Euro collapsed during the last week after a surprising ECB rate cut.
  • There is monster resistance around the 1.3020-40 level, which might contain upside in EURUSD pair.
  • EURUSD support seen at 1.2900 and resistance ahead at 1.3020.

The Euro declined heavily against the US dollar, and traded below the key pivot area of 1.3000. There is a chance of one more leg lower after a short term correction.

Technical Analysis

There was a monster trend line on the 4 hour timeframe for the EURUSD pair, which acted as a support on a number of occasions. The pair broke the mentioned trend line during this past week, and traded as low as 1.2920. Currently, the pair is correcting higher, which should be limited as it might face tons of resistances on the way up starting with the 38.2% Fibonacci retracement level of the last drop from the 1.3161 high to 1.2920 low. The most important one can be seen around the 1.3020-40 area where the 50% fib level and broken trend line coincides. The 4 hour RSI is moving up from the extreme levels, but still below the 30 mark which means a short rally is possible in the coming sessions.

Chart

On the downside, initial support can be seen around the last low of 1.2920. If the Euro sellers manage to break the mentioned level, then a move towards the 1.2880 support level is possible moving ahead.

Euro Zone Sentix Investor Confidence Index

Later during the London session, the Euro zone Sentix Investor Confidence Index will be released by the Sentix GmbH. The forecast is of a small decline from 2.7 to 2.0. Let’s see how the outcome plays out and impacts the EURUSD pair in the short term or not.

Overall, selling rallies remain a good option in the near term around the 1.3020-40 levels.

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