EUR/USD Will Likely Recover Gains If Support Holds Strong
- Before it corrected lower, the EUR/USD tested 1.0090.
- On the 4-hours chart, a significant bullish trend line is developing with support at 0.9820.
- GBP/USD increased in speed above 1.1500, but the price of gold gradually declined.
- In Q3 2022 (Preliminary) (QoQ), the GDP of the Euro Zone could increase by 0.2%, down from 0.8%.
Technical Analysis of EUR/USD
In relation to the US Dollar, the Euro began to rise steadily over the resistance level of 0.9900. The EUR/USD broke through resistance at 1.0000 and continued to climb.
The pair even overcame the 1.0050 resistance level and settled well above the 100 simple moving average (red, 4-hours) and the 200 simple moving average, as shown on the 4-hours chart (green, 4-hours).
Before there was a downward reversal, a high was established near 1.0091. Below the 1.0050 and 1.0020 support levels, the pair fell. The downward movement from the 0.9704 swing low to 1.0093 high was retraced 23.6% by the Fibonacci retracement level, which was breached by the bears.
The 0.9890 level serves as a temporary support. It is close to the 50% Fibonacci retracement level of the upward movement from the 1.0093 high to 0.9704 swing low.
Near the 0.9840 zone and the 100 simple moving average is the next significant support (red, 4-hours).
On the same chart, a significant bullish trend line with support at 0.9820 is also developing.
The pair can enter a negative zone if the downside moves below the 0.9840 area. In the described scenario, it might fall toward the 0.9750 support. A significant resistance area for EUR/USD is located close to the 1.0020 area.
Near 1.0050 may serve as the next significant barrier. Any additional gains would accelerate a move in the direction of the 1.0120 mark, over which it might even test 1.0180.
Regarding GBP/USD, the pair picked up speed to move above the 1.1500 resistance zone, and there is potential for further gains.
Economic News To Trade Today
- German Retail Sales for Sep 2022 (MoM) are forecasted to decline by 0.3%, compared to the previous -1.3%.
- German Retail Sales for Sep 2022 (YoY) are forecasted to be down 0.4% from the previous quarter’s -4.3%.
- GDP for the Euro Zone for Q3 2022 (Preliminary) (QoQ) is forecasted to increase by 0.2% from the previous 0.8%.
Author: Amogo Solomon
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