Forex Market Analysis: EUR and USD Approaches The 1.0507-1.0494 Support Area

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Thursday, April 13, 2017 02:59 PM / Meristem


Fundamental Indication 

USD: The dollar has been reacting to the mixed sentiments by market participants as a result of the Political discussions and economic news releases. This includes, but not limited to:

  • The meeting held last week between President Donald Trump and President Xi Jinping. President Trump hinted on the success of both countries’ relationship based on satisfactory U.S.-China trade decisions, whilst urging the Chinese President to do more, to curb North Korea's nuclear program.
  • The negative Non-Farm Payroll (NFP) figure (98k) for March (vs. forecast of 180k).
  • The positive unemployment rate change in March (4.5% vs forecast of 4.7%).

EUR: The German ZEW Survey (Economic Sentiments) for April released yesterday, showed an increase in the positive sentiments towards the German Economy (19.5, vs. forecast of 14.8 and previous of 12.8). This data release only had an effect on the market in the short term (intraday) as the pair closed slightly positive with a shade of mixed sentiments.  

Technical Analysis

  • The pair have been trading within the range of the 1.0874 resistance level and the 1.0494 support level. The pair have also been making higher lows and lower highs, which indicate possibilities of a positive trend.
  • The key resistance and support areas are the 1.0874 -1.0830 resistance area, 1.0507-1.0494 support area and the 1.0410 -1.0341 support area.
  • We advise an investment decision only when the price reaches any of the key support or resistance area with a bullish or bearish candlestick confirmation.
  •  For a bullish scenario, stop loss should be at the low of the candlestick
  • For a bearish scenario, stop loss should be at the high of the candlestick

NB: Economic data release for the US Consumer Price Index (YoY) and the US Consumer Price Index Ex Food and Energy (YoY) for March could influence the price movement of the pair. 

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