EUR/USD Breaks Key Resistance Ahead of US Mfg Data

The Euro (EUR) extended upside movement against the US Dollar (USD) on Monday, increasing the price of EUR/USD to more than 1.0800 ahead of the U.S. Dallas Fed Mfg Business Index news. The technical bias remains bullish because of a higher low in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded around 1.0848. A hurdle may be noted near 1.0928, the 61.8% fib level ahead of 1.1115, the upper trendline resistance as marked with red color in the given below chart. A break and daily closing above the red trendline shall incite renewed buying interest, validating a move towards the 1.1350 resistance zone.

On the downside, a support may be seen near 1.0808, the trendline support area as demonstrated in the given above daily chart with brown color. A break and daily closing below the 1.0808 trendline support shall push the pair again into bearish territory, validating a move towards the 1.0400 support zone which is a psychological number. The technical bias shall remain bullish as long as the 1.0808 support zone is intact.

U.S. Dallas Fed Mfg Business Index

The Dallas Federal Reserve is scheduled to release the Manufacturing Business Index data today during the US trading session. According to the average forecast of different economists, the business index registered a reading of 22.0 points in March as compared to 24.5 points in the month before. The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state factory activity. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month. Survey responses are used to calculate an index for each indicator.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.

usmanahmed7290@gmail.com'

Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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