The EUR/USD is trading lower on Tuesday and inside Friday’s range. This move suggests investor indecision and impending volatility. Earlier in the session, buyers tried to rally the Euro, but didn’t have the volume behind the move.
Many of the major players are still on the sidelines until the start of the new year so volume is expected to be muted. This could lead to exaggerated moves at times.
There were no major reports from the Euro Zone today. Germany and Italy are on a bank holiday. In the U.S., the S&P/CS Composite-20 HPI is expected to come in at 6.3%. The Richmond Manufacturing Index is expected to show a 22 read versus a 30 last month.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 1.1901 will signal a resumption of the uptrend.
The price action is currently being controlled by a pair of retracement zones. This is helping to fuel the sideways price action.
The main retracement zone is 1.1823 to 1.1886. The minor retracement zone is 1.1829 to 1.1855.
Daily Technical Forecast
Based on the current price at 1.1852 and the earlier price action, the direction of the EUR/USD today is likely to be determined by trader reaction to the short-term Fibonacci level at 1.1855.
A sustained move under 1.1855 will signal the presence of sellers. This could lead to a labored break with potential downside targets an uptrending Gann angle at 1.1836 and a pair of 50% levels at 1.1829 and 1.1823.
A sustained move over 1.1855 will indicate the presence of buyers. The daily chart shows there is room to the upside with the target the main Fibonacci level at 1.1886.