FXEMPIRE
All

EUR/USD Daily Forecast – Euro Lingers Around Moving Average Confluence

EUR/USD is testing a major confluence of resistance deriving from the 20 and 200-day moving averages ahead of US CPI data.
Jignesh Davda
EUR/USD

EUR/USD extended higher on Monday but the rally appears to have stalled at a moving average confluence. The latest inflation data from the United States will be released later in the session which should trigger volatility and ultimately indicate if the pair is to reverse lower from here.

Last week, the US dollar dominated the major currencies, and as such, EUR/USD carries a bearish bias over the near-term. From a broader perspective, the single currency has been recovering higher against the greenback since posting a low in October.

The euro is generally performing well among the major currencies and is the second-best performer among the week thus far, falling only behind the Swiss franc. The British pound is the worst performer as it fell sharply after a poor GDP reading on Monday.

The consumer price index in the US is expected to have risen 0.2% in December, and any deviation from that figure will tend to accompany a sharp reaction in the markets. In addition to the CPI release, FOMC member Williams is scheduled to speak.

Technical Analysis

EUR/USD has been recovering higher for the past two sessions, however, last week’s rejection above 1.1200 stands to draw sellers. With important resistance in play, this could be an area where the pair resumes lower.

EURUSD Daily Chart

Resistance for EUR/USD comes in at roughly 1.1138 as the 20 and 200-day moving averages have converged towards each other to create a confluence. There is some potential for a spike above resistance depending on the outcome of the CPI release, but the daily close will tend to be important.

In the early day, EUR/USD has been consolidating in a tight range and this type of price action may continue up until the CPI data is released.

An upside break in the exchange rate puts the focus on 1.1170 resistance. While the pair remains below the moving average confluence, the next area of interest comes in at 1.1070 as a rising trendline comes into play. This trendline connects the October low with lows posted in November.

Bottom Line

  • The EUR/USD recovery has stalled with important resistance in play from the 20 and 200 DMA.
  • CPI data will be released from the US later today and is expected to drive volatility to the markets.
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
IMPORTANT DISCLAIMERS
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.
RISK DISCLAIMER
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.
FOLLOW US