Key Highlights

• The Euro formed a base near 1.1120 against the US Dollar and made a nice upside move.
• The EUR/USD pair broke a contracting triangle pattern on the 4 hours chart at 1.1170 to clear the path for more gains.
• This past Friday in the US, the number of New Home sales figure for May 2017 was released, which posted an increase of 2.9% (MoM).
• Today in the Euro Zone, the German business sentiment index for June 2017 will be released, which is forecasted to decrease from 114.6 to 114.4.

EURUSD Technical Analysis

It seems like the Euro has formed a good support base near 1.1100 20 against the US Dollar. The EUR/USD pair is currently trading with a positive bias, and may extend gains above 1.1200.

Looking at the 4 hours chart of EUR/USD, the pair broke a contracting triangle pattern at 1.1170. The pair even cleared the 38.2% Fib retracement level of the last decline from the 1.1295 high to 1.1120 low.

It has opened the doors for more gains, but the pair needs to break 1.1200 10 and the 100 simple moving average (H4) for further gains. Moreover, the 50% Fib retracement level of the last decline from the 1.1295 high to 1.1120 low is also at 1.1208.

So, there is a chance of a minor dip in EUR/USD back towards 1.1170 before it attempts to break the 100 SMA at 1.1210.

US New Home Sales

This past Friday in the US, the number of New Home sales figure for May 2017 was released by the US Census Bureau. The forecast was lined up for an increase of 5.4% in sales, compared to the previous month.

However, the actual result was lower than the forecast, as there a rise of 2.9% in the sales. The report added that “Sales of new single family houses in May 2017 were at a seasonally adjusted annual rate of 610,000. This is 2.9 percent (±13.0 percent) above the revised April rate of 593,000 and is 8.9 percent (±21.9 percent) above the May 2016 estimate of 560,000”.

Overall, the market sentiment for the Euro has improved recently, but today’s release of the German business sentiment index for June 2017 might play a crucial role.