EUR/USD outlook: a new ascending channel is being formed

The EUR/USD pair remained stable on Thursday, it did not have enough momentum to rise above its two-week high of 1.1287. By the close of the day, the Euro fell to 1.1250. In Europe, economists have cut their inflation and growth forecasts in the Eurozone and warned of the risk of further cuts, as uncertainty ranging from Brexit to trade wars makes companies more reluctant to invest.

From yesterday’s speech by the ECB President, it became clear that interest rates in the Eurozone would not rise until the end of this year. The US Fed also confirmed the easing of monetary policy in the published minutes of the last meeting. During the day, the euro is expected to show significant movement on both sides. The reason is that the Euro jump correlated with the US Dollar, which today traded lower on today’s open, in response to the aggravation of trade relations between the United States and the European Union.

EUR/USD technical analysis

The Euro rebounded nicely recently after forming a support base near the 1.1220 level against the US Dollar. The EUR/USD pair traded above the 1.1265 resistance level to move into a positive zone.

There was a break above a connecting bearish trend line at 1.1270 on the hourly chart. Moreover, the pair broke the 1.1280 resistance and settled above the 50 hourly simple moving average.

The pair traded as high as 1.1294 and it is currently correcting lower. However, the previous resistance near the 1.1280 level and the 23.6% Fib retracement level of the last wave from the 1.1249 low to 1.1294 high is likely to act as strong support.

On the upside, if the pair breaks the 1.1294 high, it could even surpass the 1.1300 resistance and test the next key resistance near the 1.1320 level.