EUR/USD Daily Forecast – Euro Continues to Range Below ResistanceEUR/USD made another attempt at a critical resistance area in early trading on Friday but sellers jumped in to hold the pair within a range.
EUR/USD Remains at Key Inflection Point
EUR/USD has traded in a range for most of the week and is holding below a 12-week declining trendline. The pair shows some resilience as dips in the pair have been short-lived. At the same time, the absence of an upside break at this stage could lead to a turn lower, in line with the broader trend.
Volatility has slowed this week despite the Federal Reserve meeting which took place on Wednesday. Fed meetings typically accompany a volatile reaction in dollar pairs but this months meeting was certainly an exception.
Economic data out of Germany fell short of expectations today but the release did not move the exchange rate much. Producer price index figures declined by half a percent in the month to August while analysts had expected it to remain unchanged.
Two Fed member speeches are scheduled for later today. Members Williams and Rosengren are both speaking early in the North American session and should offer some additional views on monetary policy in follow up to Wednesday’s Fed decision.
The above-mentioned trendline extends from a high posted in late June and has capped rallies in EUR/USD twice this week already.
In the late week, EUR/USD has been contained within a range between support at 1.1041 while the upside has been blocked by the mentioned trendline.
The pair trades virtually unchanged for the week and the session ahead will determine how the weekly candle prints. If the pair closes near current levels by the end of the day, it would point to some exhaustion. In such scenario, I would expect the pair to pare gains a bit early next week.
On the other hand, a sustained break of the trendline will tend to renew bullish momentum. It would also signal a double bottom which points to a measured move towards roughly 1.1250.
- EUR/USD remains capped by resistance from a 12-week declining trendline.
- The pair is held within a range in the late week with 1.1041 holding declines.