EUR/USD Daily Forecast – Euro Consolidates Below 50 DMA

After a sharp push higher last week, EUR/USD has fallen into a range below the 50-day moving average.
Jignesh Davda

EUR/USD Rally Stalls

Last week EUR/USD rallied above an important technical resistance confluence that I’ve talked about in my last few daily forecasts. At this point, it will be important to asses whether the breakout is real, or just a trap for buyers.

One important aspect is assessing technical developments is the longer-term trend. For EUR/USD this is certainly to the downside even though price action has been choppy for the past year or so.

For that reason, additional confirmation would provide further conviction that the pair has indeed put in a bottom, or at least, a near-term one.

Currently, resistance from a horizontal level at 1.1059 has been holding the upside and daily closes have been held by the 50-day moving average. I suspect this will continue to be major resistance over the near-term.

A bit of a support confluence is developing in around 1.1000 as the 200 and 50 moving averages on a 4-hour chart have converged toward the level. Further, a rising trendline from October lows and the 20-day moving averages are also nearby. If the pair were to break below this area, I would assume that last week’s upside break was a bull trap.

Daily Technical Outlook

With a relatively light economic calendar in the session ahead, I suspect that the pair will continue to trade within the roughly 1.1000-1.1050 range.

EURUSD Daily Chart

There was some selling pressure around the European open and this might keep the pair well offered, at least until the North American session gets underway. In this context, I see important resistance at 1.1033.

EUR/USD briefly traded below yesterday’s low in early trading, likely taking stops from weak hands. If the pair remains under pressure, I think it will try and trigger further stops below Friday’s low of 1.1001. However, the psychological 1.1000 handle is likely to draw buyers. I see it as major support for the session ahead.

EURUSD 4-Hour Chart

On the other hand, if we reverse sentiment a bit and start to get bullish, I’m looking at 1.1059 to continue capping gains in the near-term.

Bottom Line

  • EUR/USD has been ranging with the 50-day moving averages holding the pair on a daily close basis.
  • I suspect the pair will continue holding in this range considering the light economic calendar.
  • Strong selling pressure at the European open suggests a slight bearish bias for the session ahead.
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.