The main highlights
- EUR / USD climbed sharply after marking the 1.1765 support region.
- There was a break above a key bearish trend line with resistance near 1.1835 on the 4-hour chart.
- GBP / USD traded to a new monthly high and it broke the resistance at 1.3320.
- The German CPI could rise 0.2% in August 2020 (YoY) (Prelim), up from the last -0.1%.
EUR / USD technical analysis
This past week, the euro remained good bids above the level of 1.1765 and 1.1750 against the US dollar. Recently, the EUR / USD started with a sharp rise and broke a few key obstacles near 1.1835.
Looking at the 4-hour chart, the pair gained bullish momentum after surpassing the 1.1835 resistance and the 100 simple moving average (red, 4 hours). There was a break above the 50% Fib retracement level of the downward movement from the high 1.1965 to 1.1754.
In addition, there was a break over a key bearish trend line with resistance near 1.1835. The pair even traded above the 1.1880 resistance and it is now well above the 200 simple moving average (green, 4 hours).
On the upside, there is strong resistance waiting near the 1.1950 and 1.1965 levels. It looks like the EUR / USD could continue to rise and it may break the last swing high near 1.1965 to record a new monthly high. GBP / USD already broke the last swing high near 1.3280 and traded at a new monthly high above 1.3350.
If EUR / USD does not cope with the 1.1950 resistance or 1.1965 high, it may start a new fall. An initial support is near the 1.1835 level and 100 SMA. Any further losses could push the pair back towards the 1.1765 support.
Looking at the USD / JPY, the pair saw strong resistance near 107.00, resulting in an ugly decline below the 106.00 support.
Upcoming financial announcements
- German CPI for August 2020 (YoY) (Prelim) – Forecast + 0.2% against -0.1% previously.
- German CPI for August 2020 (MoM) (preliminary) – Forecast -0.2% against -0.5% previously.