EUR/USD Daily Forecast – Euro Holds Above Major SupportAfter a dip on Friday, EUR/USD looks to be well support with moving average support in play on a daily chart.
EUR/USD Attempting to Bounce from Support
Better than expected inflation data out of the US on Friday led to a continuation lower in EUR/USD to test a major support area. The downside momentum has subsided at the start of the new week, although the pair has not been able to recover much higher as of yet.
Volatility is likely to remain suppressed for the currency pair as most banks from major economies around the world will be off from Tuesday onward to celebrate the Christmas holiday. Friday is not a holiday, but many traders will likely take it off as well, or at least be hesitant to put on any meaningful positions.
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The latest US durable goods orders report will be released later in the day. Analysts are expecting an increase of 0.2% in the value of new purchase orders for November. The data release typically does not have a big impact on the exchange rate.
However, the exchange rate is testing some fairly import support. On a daily chart, both the 20 and 50-day moving averages have converged towards each other to create a confluence of support near 1.1082.
On a 4-hour chart, the 200 moving average is also in play.
In addition to that, the 1.1072 price point is a well-respected one for EUR/USD. This level has acted as both support and resistance since August. This is best seen on a daily chart.
Last week, EUR/USD was held lower by its 200-day moving average which ultimately led to a reversal in trend. Prior to that, the pair had been in an uptrend for most of the month.
The breakout point from last week of 1.1109 presents a major hurdle for the pair in the week ahead. Considering the holidays, the pair might just get stuck in a range between 1.1070 and 1.1109.
- A range appears likely in the week ahead considering the holidays
- EUR/USD is well supported at current levels with the 20 and 50-day moving averages in play.