EUR/USD hits resistance near 1.1000

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Source: Dukascopy Bank SA


The rate was surging after finding support in the 1.0880/1.0888 range, as the management of the European Central Bank added fuel to the fire. Despite keeping the Euro rate unchanged, the central bank President Christine Lagarde made comments on how the policy should be strict and tight, which pushed the Euro even higher.

After the events, the surge continued until the EUR/USD reached one of the resistance ranges that we had marked at the start of the week. Namely, the November high level range at 1.1008/1.1017 has held and pushed the rate below 1.1000. Immediately afterwards, the 1.1000 acted as resistance and the 1.0980 level as support.

The rate consolidated, before declining on Friday morning due to the release of the lower than expected European country Markit Institute Purchasing Managers Index survey results. The surveys revealed that the EU firms are even more pessimistic about the future than previously expected. During the event, the support of the weekly R2 simple pivot point and the However, after the 1.0960/1.0965 were ignored.

The future outlook now depends whether the central bank policy momentum remains stronger than the PMI release caused decline. The Euro could move against the US Dollar either upwards or downwards.

A resumption of the surge is set to face the 1.1000 mark, the 1.1008/1.1017 November and December high level range. Above these levels, note that the weekly R3 could act as resistance at 1.1033.

On the other hand, a decline of the Euro against the USD could look for support in the 50-hour simple moving average near 1.0915 and the 1.0900 mark. Below these levels it is highly likely that the 1.0880/1.0888 range comes back into action. Below the range, note the weekly R1 simple pivot point at 1.0862 and the 100-hour simple moving average near 1.0847.
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