EURUSD Rallies Ahead of Eurozone’s Growth Data

Technical Bias: Bearish

Key Takeaways:

  • EURUSD extends winning streak
  • Eurozone’s growth data is expected today
  • Lower Low suggests continuity of bearish trend

The Euro (EUR) extended upside movement against the US Dollar (USD) on Friday, increasing the price of EURUSD to more than 1.1400 ahead of some key economic releases. The technical bias remains bearish in the long run due to a Lower Low on the daily chart.

Technical Analysis

As of this writing, the pair is being traded near 1.1402. A support can be seen near 1.1269, the low of the recent downside move on the four-hour timeframe ahead of 1.1100, the confluence of psychological number as well as swing low of the last major dip as demonstrated in the following daily chart.

On the upside, the pair is expected to face a hurdle near 1.1444, the 23.6% fib level ahead of 1.1659, the 38.2% fib level. The technical bias will remain bearish as long as the 1.1532 resistance area is intact.

Eurozone Growth

The Gross Domestic Product (GDP) for the Eurozone remained 0.67% in the fourth quarter as compared to 0.80% in the same month of the year before, the average forecast of different economists say. Generally speaking, higher GDP reading is considered positive for the economy thus a worse than expected actual outcome will be seen as bearish for EURUSD and vice versa.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair on dips still appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing below the 1.1100 support area as described above.

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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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