EUR/USD Breaks Key Support After Eurozone GDP Data

The Euro (EUR) inched higher against the US Dollar (USD) on Monday during Asian session, increasing the price of EURUSD to more than 1.1300. The technical bias remains bullish because of a Higher High in the recent upside rally however the pair recently broke a key support level due to which some more downside movement can be expected.

Technical Analysis

As of this writing, the pair is being traded near 1.1309. A hurdle may be noted near 1.1338, a key horizontal resistance area ahead of 1.1616, the swing high of 3rd May as demonstrated in the following daily chart. A break above the 1.1616 resistance area will confirm the bullish bias, validating a move towards the 1.1714 resistance area in the long run.

On the downside, the pair is likely to find a support around 1.1217, a key horizontal support level ahead of 1.1144, the swing low of 24th April and then 1.1100, the psychological number. The bias will remain bullish as long as the 1.1217 support area is intact.

Eurozone Growth

Seasonally adjusted gross domestic product for the 19-member eurozone grew by 0.5 percent during the January-March period, compared to the last quarter of 2015, according to official flash estimates released Friday. The figure was revised downward from the preliminary flash estimate of 0.6 percent announced in April. Compared with the first quarter of 2015, GDP growth of 1.5 percent was registered during the first quarter of 2016. The flash estimates published by Eurostat, the European Union’s statistical office, showed that GDP of the entire 28-member EU also grew by 0.5 percent during the January-March quarter when compared to the last quarter of 2015 and by 1.7 percent in comparison with the same quarter last year.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around any of the above mentioned levels could be a good strategy if we get a valid bullish reversal candle.

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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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