by FXOpen on January 8th, 2019

EUR/USD Technical Analysis: The Euro may test 1.1500 In the near term

Heading into 2019, we are taking a more neutral view of the US Dollar after being bullish for much of 2018. U.S. monetary policy has ceased to be a support, with Fed fund futures having now largely priced out any hike for 2019, and now imply a 25 bp cut by mid-2020.

On the Euro side of the coin, there are increasing signs of flagging economic growth momentum. We see EUR/USD as having entered a broadly sideways range phase as markets continue to fathom the push of the populist political movement in Europe and the pull of a more neutral Fed policy stance.

The Euro recovered nicely and moved above the 1.1350 resistance level against the US Dollar. The EUR/USD pair even broke the 1.1380 resistance area to move into a positive zone.

The pair traded towards the 1.1400 barrier and settled above the 50 hourly simple moving average. The pair traded above the 50% Fib retracement level of the last decline from the 1.1496 high to 1.1291 low.

If buyers succeed in clearing the 1.1420 resistance, there could be more gains in the near term. The next resistance is near the 1.1480 level, above which the pair may test 1.1500 in the near term.

On the downside, an initial support is at 1.1380, below which there is a risk of more losses towards the 1.1350 level. The main support is at 1.1320, where buyers are likely to defend losses.

By FXOpen

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