EUR/USD Forecast – Euro to Break Down?
- The Euro remains below the 1.1920 resistance level against the US Dollar and struggling to recover.
- A bullish trend line with support at 1.1870 on the hourly chart of the EUR/USD pair is holding losses.
- Today, the Euro Zone PMI service report for August 2017 was released by the Markit Economics.
- The outcome was below the forecast of 54.9, as there was a decline in the PMI to 54.7.
The Euro recently failed to hold gains and moved back below the 1.2000 support area against the US Dollar. The EUR/USD pair traded as low as 1.1821 before attempting a recovery.
The pair is currently in a recovery mode, but struggling to break the 1.1920 resistance area. The stated 1.1920 resistance represents the 50% Fib retracement level of the last decline from the 1.1978 high to 1.1854 low.
On the downside, there is a bullish trend line with support at 1.1870 on the hourly chart of the EUR/USD pair. However, the pair is below the 100 hourly simple moving average and struggling to move above 1.1920.
Therefore, there are chances of a break below the 1.1870 support in the near term.
Euro Zone Services PMI
Today in the Euro Zone, the PMI service report for August 2017 was released by the Markit Economics. The forecast was slated for no change in the PMI from the last reading of 54.9.
However, the actual result was below the forecast of 54.9, as there was a decline in the PMI to 54.7. The report pointed out that “On current trend, output growth so far in the third quarter is slightly below its second quarter high, but remains among the best seen over the past seven years.“
On the other hand, the German Services PMI posted a better than expected reading for August 2017. There was a rise in the PMI from the last reading of 53.4 to 53.5.
However, it seems like the Euro is not impressed and might break the 1.1870-60 support in the near term.
GBP/USD Forecast – More Losses Likely
- The British Pound is also following a declining path and trading below the 1.2935-40 resistance against the US Dollar.
- There is a declining channel forming with resistance near 1.2935 on the hourly chart of the GBP/USD pair.
The British Pound started a downside move from the 1.2995 swing high against the US Dollar. The GBPUSD pair broke the 38.2% Fib retracement level of the last wave from the 1.2851 low to 1.2995 high.
The pair is also below the 100 hourly simple moving average, but trading near the 50% Fib retracement level of the last wave from the 1.2851 low to 1.2995 high.
There is a declining channel forming with resistance near 1.2935 on the hourly chart, which might continue to act as a downside move catalyst.
On the downside, the 1.2900 handle is a decent support for GBP/USD buyers.
USD/JPY Forecast – Correction Remain Capped
- The US Dollar is under pressure but might correct towards 109.70-80 against the Japanese Yen.
- There is a crucial trend line resistance near 109.80 forming on the hourly chart of the USD/JPY pair.
The US Dollar started a bearish wave from the 110.60 high against the Japanese Yen and moved below 109.80. The USD/JPY pair tested a bullish trend line at 109.19 on the hourly chart and might attempt a recovery.
However, the upside move is likely to be capped by a crucial trend line resistance near 109.80. Selling rallies near 109.80 can be considered in the near term.
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