EUR/USD Analysis – Euro Will Hit New Highs if Closes Above This Level

Whenever the Euro is discussed in the global arena all eyes are on Germany as the locomotive of the Eurozone train. German GDP reported recently shows that the country’s economic recovery plan is going under the plan. German GDP QoQ for the fourth quarter reported is at 0.3%, closing above the forecasted 0.1%.

As in the EURUSD pair, Euro still looks stronger than the US Dollar, the last is in a downtrend again and is already below 91. The postponement of the stimulus check, military drills in the South China Sea and the recent quote from Schumer about lawmakers drafting a bill to outcompete China could place the US Dollar in a weaker position, despite the positive outlooks from the FED.

The EURUSD chart is about to confirm the Inverted Head and Shoulders pattern, which will signal the bullish run of the Euro up to $1.23400.

Euro is still testing the resistance at $1.21660 and if the pair is able to close above this level and the $1.2777 resistance up ahead, this will be a confirmation of another hike.

This 15M chart of the pair indicates levels to watch when making an investment decision on EURUSD. The correction of the last impulse has ended on at 0.5 Fibonacci level, however the price action after the correction has no signs of an impulse wave, hence the pair could possibly test $1.21256 and $1.21118 before going into another bull cycle.

The short-term local dynamic support and resistance is important to trace as the breakout from either the support or resistance could denote the short-term trend direction. The economic calendar also suggest to watch important events today as the FED Chair Mr. Powell will testify before the JEC, US Home Sales data will be announced and according to forecasts, Home sales surged in January, if the Home Sales data is positive than it is expected that the US GDP which is released tomorrow might be beyond the forecasted.