The Euro (EUR) inched lower against the US Dollar (USD) on Monday, dragging the price of EUR/USD to less than 1.0600 following the US New Home Sales news release. The technical bias remains bearish because of a lower high in the recent upside rally.
Technical Analysis
As of this writing, the pair is being traded around 1.0563. A support may be seen near 1.0507, the trendline support area as demonstrated in the given below chart with brown color. A break and daily closing below the 1.0507 trendline support shall incite renewed selling interest, validating a move towards the 1.0400 support zone which is a psychological number.
On the upside, the pair is expected to face a hurdle near 1.0700, the trendline resistance area ahead of 1.0819, the 50% fib level and then 1.0937, the upper trendline resistance as marked with red color in our chart. The technical bias shall remain bearish as long as the 1.0819 resistance zone is intact.
New Homes Sales Data
New U.S. single-family home sales rose less than expected in January, likely held back by heavy rains and flooding in California, but continued to point to a strengthening housing market despite higher prices and mortgage rates. Other data on Friday showed a dip in consumer sentiment this month, though it remained at a level consistent with a healthy pace of consumer spending. The economy has gained momentum, supported by a labor market that is near full employment.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT
