EURUSD May Have Made a Major Bottom

Technical Bias: Bullish

Key Takeaways

• Euro broke a crucial resistance versus the US dollar this past week and looks set for more gains.
• EURUSD has a major support at 1.1100, which can be considered as a buy zone.
• Euro Area Manufacturing Purchasing Managers Index (PMI) will be released by the Markit Economics today, which is expected to remain at 51.9.

Recent surge in EURUSD suggests that the pair is under bullish pressure and might continue to trade higher in the near term.

Technical Analysis

The EURUSD pair enjoyed a good bull run this past week, as the US dollar weakened a lot against most major currencies. There was a monster bearish trend line on the daily chart of the EURUSD pair, which acted as a major catalyst in the short term. It managed to settle above the 100-day simple moving average (SMA), which is a solid sign that the Euro bulls are here to stay. If the pair corrects lower from the current levels, then the broken trend line could provide support to the pair. Moreover, the 23.6% fib retracement level of the last leg from the 1.0522 low to 1.1287 high is also sitting around the same area along with the 100-day SMA.

On the upside, a break above the recent high of 1.1287 might clear the way for more gains moving ahead.

The daily RSI is around the overbought level, suggesting a minor correction is possible.

Euro Area Markit PMI

Later during the London session, the Euro Area Manufacturing Purchasing Managers Index (PMI) highlighting business conditions in the manufacturing sector will be released by the Markit Economics. The forecast is of no change in April 2015.

Trade Idea

Buying dips in the EURUSD pair around the 100-day SMA looks good as long as it stays above the same.