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EUR/USD Daily Forecast – Euro Rangebound Above 1.1100 Handle

By:
Jignesh Davda
Published: Dec 20, 2019, 09:47 UTC

EUR/USD is trading in a relatively tight range with buyers stepping in on dips towards the 1.1100 price point.

EUR/USD

EUR/USD Lacks Volatility

Once again EUR/USD is seen trading in a very tight weekly range with a high to low spread of around 70 pips. These types of ranges are unusual and volatility is at the lower end of what has been typical over the last decade or so.

The light economic calendar this week did not help. Later in the session, the latest PCE price index figures will be released out of the United States. Although these figures play a large role in Fed decisions, they rarely trigger volatility in the dollar pairs. Analysts are looking for the core PCE index to come in at 1.6% in the year to November, unchanged from the reading last month.

Next week is also expected to be slow with banks off on Christmas holiday. Monday and Friday are regular trading days but traders often take these days off as well. For that reason, volatility might decline even further from current levels. Although we may see some price action from traders looking to square up position ahead of the year-end.

Technical Analysis

EUR/USD turned lower from its 200-day moving average in the early week but downside momentum has fizzled since. In addition to the rejection from the moving average, the pair has also dropped below a rising trendline that originates from a low printed in late November.

A potential downside target for the pair comes in at 1.1081. This level currently marks the intersection of the 20 and 50-day moving averages.

EURUSD 4-Hour Chart

To the upside, the first hurdle comes in at 1.1129. Yesterday, the pair briefly traded above the level but sellers stepped in to defend the previously broken trendline.

If the pair makes another upside attempt above 1.1129, the next level to keep an eye on is 1.1149. This marks a horizontal level and the 200-day moving average is also currently near there.

Bottom Line

  • EUR/USD volatility has declined to the lower end of typical ranges seen over the last decade.
  • The pair carries a slight bearish bias for the near-term as sellers continue to step in on rally attempts this week.

About the Author

Jignesh has 8 years of expirience in the markets, he provides his analysis as well as trade suggestions to money managers and often consults banks and veteran traders on his view of the market.

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