EUR/USD Daily Forecast – Range Remains IntactAfter a sharp surge higher in the early week, EUR/USD has fallen into a range with some important overhead resistance.
Trump Tweets Trigger Volatility But Range Holds
US President Donald Trump tweeted his disappointment in the Fed on Thursday which caused some volatility but did not break EUR/USD from its range.
His tweet stated that he was not happy about the dollar’s strength and attributed this to the Fed, stating that they have kept interest rates high compared to other countries.
In this week alone, three countries have cut interest rates. The Bank of India cut rates by 35 basis points, the Reserve Bank of New Zealand surprised markets with a 50 basis point cut, and the Bank of Thailand delivered an unexpected 25 basis point cut.
Trump’s tweet caused some volatility in the markets but overall EUR/USD and the dollar index (DXY) held within a range that has been playing out for most of the week.
Earlier today, German trade balance figures and French industrial productions numbers fell slightly short of expectations but did not have much of an impact on the exchange rate. In the US session, producer price index figures will be released. This report does not typically accompany a volatile reaction.
In yesterday’s forecast, I argued that EUR/USD is showing some resiliency as the pair is not backing down from an area that contains a fairly significant resistance confluence.
Support at 1.1188 has been holding the pair higher thus far. A close above the level today would result in a reversal morning star candlestick pattern on a weekly chart. This would tend to keep the pair bid next week as well.
Considering the light economic calendar, it seems reasonable to expect EUR/USD to continue holding within the current range.
As mentioned, there is significant overhead resistance that is in play here. Specifically, it is the 200 moving average on a 4-hour chart and a declining trendline. On a daily chart, the 50 and 100-day moving averages are also in play.
- EUR/USD has been in a range for most of the week. It looks like it will try to hold within it in the session ahead.
- The pair is on pace to post a reversal pattern on a weekly chart.