EUR/USD analysis: consolidating, still looking for a bearish breakout
|EUR/USD Current price: 1.0626
The EUR/USD pair continued trading within a tight range around the 1.0600, having extended its weekly advance by a few pips, up to 1.0657 as the dollar remained under moderate pressure, particularly during the first half of the day, amid a short-lived spike of risk aversion. Market's sentiment turned sour after a 7.4 magnitude earthquake hit Japan at the beginning of the Asian session, fueling demand for safe-haven assets. Also, US elected President Donald Trump, outlined his plans for his first 100 days in office, announcing that he intends to withdraw the US from the Trans-Pacific Partnership deal, and seek for "fair, bilateral trade deals." Wall Street however, was not concerned, with the DJIA surpassing the 19,000 benchmark for the first time ever, and the Nasdaq Composite extending to fresh record highs. The positive momentum in US stocks, prevented the greenback for falling further.
In the data front, there were no major macroeconomic releases in the Europe, although the EU preliminary consumer confidence index came in at -6.1 for November, better than the expected -7.8. In the US, existing home sales rose in October by a second consecutive month, up by 2.0%, while the Richmond FED Manufacturing index for November came in at 4, against previous -4.
From a technical point of view, the pair has made little progress, overall at risk of falling further given that it remains near this year's low, set last Friday at 1.0568, with attempts to recovery meeting selling interest in the 1.0650 region. It seems that investors are waiting for a new trigger to resume dollar's buying, rather than giving up on buying the greenback. In the 4 hours chart, the price is hovering around a bearish 20 SMA, while the 100 and 200 SMAs maintain their sharp bearish slopes well above the current level, and technical indicators aim modestly higher, but with no actual upward strength. Overall, the corrective movement can indeed extend up to the 1.0800 region, but unless the pair settles above 1.0840/60, the risk will remain towards the downside.
Support levels: 1.0590 1.0560 1.0510
Resistance levels: 1.0650 1.0690 1.0720
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