EUR/USD Daily Forecast – Euro Falls Into Consolidation Near 1.1000 Handle

US Consumer Confidence Figures Can Trigger Some Volatility

The week ahead is expected to be a slow one volatility wise. This is mostly because of the Thanksgiving holiday in the second half of the week that will have many traders take some time away from the markets.

As is typical in a holiday week, the economic calendar is quite light. Later today, the latest consumer confidence figures will be released from the US. This release might just be the highlight of the week.

I think we might see a jump in volatility after the release but it’s quite likely that this will fade quickly. After that, I’m speculating that EUR/USD prices will hold in a tight range for the remainder of the week.

There are quite a few data releases tomorrow, including GDP figures, PCE price index data and the Chicago PMI, although these figures typically do not trigger a sustained reaction in the markets.

Technical Analysis

The rejection last week near 1.1072 was a big one and I think it will tend to keep bearish pressure on the pair over the near-term. A level that I have my eye on for the week ahead is at 1.1053. This is the lower bound of a range that played out for most of last week. I consider it to be major resistance for the pair if it were to get there.

It might take some form of a catalyst to change the sentiment in EUR/USD and for a pickup in volatility. One potential source might be UK politics as the election in Britain is just over two weeks away.

In the meantime, I think EUR/USD presents a clear bearish bias. The pair failed to hold above a rising trendline yesterday that originates from a low printed in early October. There is still some potential for a bounce in the pair but I think it is clear that buyers are showing reluctance to defend support areas for the pair.

A big focal point for EUR/USD will be the 1.1000 area and if the exchange rate can get below the low set mid-month. For the week ahead, I think it might be tough to see such a move materialize. Mostly because EUR/USD has been trading in tight ranges for the past few weeks and I think the holiday later this week ensures low volatility.

Bottom Line

• EUR/USD is catching a bit of a bounce with 1.1000 support in close vicinity.
• A major resistance level for the week ahead falls at 1.1053.
• US consumer confidence figures are scheduled for release later in the day.