EUR/USD Threatens Key Support At 1.0800

Euro (EUR) rose moderately against the US Dollar (USD) on Friday, increasing the price of EUR/USD to more than 1.0970 following the release of US pending home sales data. The technical bias remains bearish because of a Lower Low in the ongoing wave.

Technical Analysis

A closer view of the 4H chart has been presented here which is highlighting the multi month trend line bounce around 1.0900 levels. Please note that the pair still remains vulnerable and needs to clear through initial resistance at 1.1100 levels to confirm that a 3 wave recovery is underway towards 1.1265 levels.

EURUSDH4

Also note that the RSI that was showing bullish divergence has turned higher for now and potential remains to push through 70 levels, before turning lower.

Immediate support is seen through 1.0900 levels (interim), followed by 1.0800 and lower, while resistance is seen through 1.1100/1.1125 levels, followed by 1.1375, 1.1490 and higher respectively. The pair remains cautiously bullish for now, till prices stay above 1.0900 levels.

US Homes Sales

The number of existing homes that went under contract across the U.S. fell last month, a sign of choppiness in a housing market that otherwise appears to be gaining momentum. Pending home sales—which measure purchases before they become final—declined 2.3% to a seasonally adjusted reading of 106.8 in September, the National Association of Realtors said Thursday. That marked the second-lowest level of the year and the second consecutive monthly drop. Economists had predicted a 1% rise in September sales.

Trade Idea

Aggressive trade setups encourage long positions, with risk below 1.0900 levels.

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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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