by FXOpen on January 11th, 2019

EUR/USD technical analysis: the Euro may soon break the 1.1540 resistance

The USD decline slowed yesterday, at least temporarily. The risk rebound, which was at least partially correlated with a weaker dollar, also shifted into a lower gear. Fed governors, including Chairman Powell, reiterated that the Fed can be patient and monitor the data in order to see whether it is still appropriate to raise rates further. The comments had a little direct impact on US yields or on the dollar. Both continued a technical intraday rebound. Sentiment on risk improved again later in US dealings.

A tame offering on the European economic data front puts December’s US CPI data firmly in the spotlight. The core inflation rate is expected to register at 2.2 on-year, unchanged from the prior month and broadly in line with near-term trend averages.

The Euro corrected lower recently and declined below the 1.1520 support against the US Dollar. However, the EUR/USD pair found support near the 1.1485 and later bounced back above 1.1500.

The pair gained traction and moved above the 1.1510 resistance and the 38.2% Fib retracement level of the last decline from the 1.1569 high to 1.1484 low. Moreover, there was a break above a break trend line with resistance at 1.1515 on the hourly chart.

The pair is now placed above the 1.1515 level and the 50 hourly simple moving average, with a bullish angle. It may soon break the 1.1540 resistance and the 50% Fib retracement level of the last decline from the 1.1569 high to 1.1484 low.

On the downside, dips towards the 1.1510 and 1.1500 are likely to face a strong buying interest in the short term.

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