The EUR/USD is bouncing back on Thursday after earlier weakness. The recovery is being fueled by data showing inflation in some German regions held this month above the target rate set by the European Central Bank.
Additionally, in the U.S., Final GDP for the first quarter came in at 2.0%, lower than expected and Weekly Unemployment Claims rose a little more than estimated.
Daily Technical Analysis
The main trend is down according to the daily swing chart, however, the price action indicates a secondary higher bottom at 1.1527 may be forming. A trade through 1.1509 will reaffirm the downtrend. The main trend will change to up on a move through 1.1721.
The short-term range is 1.1509 to 1.1721. Its retracement zone at 1.1590 to 1.1615 is resistance. Overcoming this area will indicate the buying is strengthening. The EUR/USD is currently testing the lower, or Fibonacci level at 1.1615.
The major resistance is a pair of 50% levels at 1.1681 to 1.1756. Inside this zone is a short-term Fibonacci level at 1.1720. This level stopped the rally earlier in the week at 1.721.
Daily Technical Forecast
Based on the earlier price action, the key level to watch on the downside is an uptrending Gann angle at 1.1559 and the Fibonacci level at 1.1590.
Aggressive counter-trend buyers may step in to stop the intraday price slide at 1.1559. If they fail, the market could retest the next uptrending Gann angle at 1.1534. This angle essentially provided support earlier in the session when the EUR/USD fell to 1.1527. This is the last potential support angle before the 1.1509 main bottom.
If 1.1509 fails then look for a potential acceleration to the downside with the next main bottom coming in at 1.1320.
On the upside, resistance comes in at 1.1590, followed by the 50% level at 1.1615. The daily chart begins to open up on a move over 1.1615 with target angles coming in at 1.1651 and 1.1681.
With the EUR/USD pulling back, trader reaction to 1.1559 and 1.1534 will tell us if the counter-trend buying is strong enough to prevent a resumption of the downtrend.