Fundamental analysis

EUR/USD rejected by downtrend line, 0.9899 as key resistance

The EUR/USD pair seems undecided in the short term. It was trading at 0.9864 at the time of writing. As you already know, the rate rallied as the Dollar Index crashed after Japan’s intervention in the FX market.

Fundamentally, the USD took a hit from the US economic data yesterday. The Flash Manufacturing PMI dropped from 52.0 to 49.9 signaling contraction, while Flash Services PMI came in at 46.6 points versus 49.6 points in the previous period. On the other hand, the German and Euro-zone manufacturing and services sectors are still in the contraction territory.

Today, the Euro received a helping hand from the German Ifo Business Climate index which came in at 84.3 points above the 83.4 expected. Later, the US CB Consumer Confidence could be decisive in the short term. The indicator is expected to drop from 108.0 to 105.9 points. A deeper drop could be bad for the USD.

EUR/USD New Range Pattern!

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As you can see on the H1 chart, the EUR/USD pair continues to stay near the downtrend line, signaling an imminent breakout. It’s trapped between the weekly pivot point of 0.9810 and 0.9899 levels.

The price action developed a minor range. Escaping from this pattern could bring us new trading opportunities.

EUR/USD Prediction!

A valid breakout through the downtrend line and above 0.9899, a new higher high activates an upside continuation and brings new long opportunities.

The material has been provided by InstaForex Company – www.instaforex.com


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