The 20 December EURUSD Technical Forecast shows that the pair surged to its highest for the week and it could be influenced by comments from German Bundesbank’s Weidmann US existing home sales figure.
20 December, GKFX – The EUR/USD rose to 1.1849 yesterday and remained bid in Asia as the 10-year US-German yield spread remains flatlined above 207 basis points despite US tax reform optimism.
- EUR/USD conflicting chart patterns.
- Focus on US-DE spread
20 December EURUSD Technical Forecast
The EUR/USD daily chart shows the pair is caught in a bull-bear tug of war as shown by conflicting chart patterns – Bull flag and potential head and shoulders reversal.
A close above 1.1873 would signal a bull flag breakout. It is a continuation pattern, i.e. an upside break would signal a revival of the rally from the Nov. 7 low of 1.1554. The pair could then target 1.2368 (target as per the measured height method).
Also, the chart shows a potential bearish head and shoulders reversal. The Right shoulder of head & shoulders top is still forming, and the neckline support is near 1.1720. A close below 1.1720 would open doors for re-test of the November low of 1.1554.
Focus on EZ data and Weidmann speech
The EUR could find fresh bids if the Eurozone PPI due at 07:00 GMT betters estimates by a big margin. The pair could also be influenced by comments from German Bundesbank’s Weidmann and the US existing home sales figure. Bears could make their presence felt if the 10-year US-German yield spread breaks above the recent high of 209.5 basis points.
Support levels: 1.1800 1.1750 1.1715
Resistance levels: 1.1870 1.1900 1.1940
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