Euro (EUR) extended upside movement against the US Dollar (USD) on Monday, increasing the price of EURUSD to more than 1.1230 following the release of Eurozone’s Gross Domestic Product (GDP) news. The technical bias remains bearish because of a Lower Low in the recent downside move.
As of this writing, the pair is being traded near 1.1231. A support may be noted around 1.1216, a key horizontal support area as demonstrated in the following chart ahead of 1.1180, the swing low of the recent downside wave and then 1.1131, the channel support. A break and daily closing below the channel support would push the pair into deeper correction phase.
On the upside, the pair is likely to face a hurdle near 1.1338, the horizontal resistance area ahead of 1.1376, the swing high of 11th February. The technical bias will remain bearish as long as the 1.1616 resistance area is intact.
After eight painful years of crises and near stagnation, the eurozone’s economy has finally surpassed its pre-crisis high, beginning the year by outpacing growth in the UK and the US. The eurozone economy grew 0.6 per cent in the first quarter, helped by a surprisingly robust performance by France. The better-than-expected figures took overall gross domestic product past the peak it hit in the opening quarter of 2008. The figure, released by Eurostat, the European Commission’s statistical arm, showed the single currency area expanding at the fastest rate since the beginning of 2015 and performing better than the broader EU for the first time since 2011.
Considering the overall technical and fundamental outlook, buying the pair in short term could be a good strategy.