EUR/USD Forecast: central banks couldn't move the pair, but political woes will

• Political woes to retake center stage in terms of price action.
• EUR/USD unchanged weekly basis, but bears gaining ground.  

The EUR/USD pair ends the week as it started, stuck to a tight range just below the 1.1800 threshold. Loads of water run under the bridge, yet none of it could convince investors. And here comes winter holidays, which means that chances of seeing definitions during the upcoming days are quite limited.

Anyway, central banks passed doing pretty much what the market was expecting, having limited and short-lived effects on the pair. The US Federal Reserve raised its rates by 25 bps, maintaining its preview of three rate hikes for 2018, despite sluggish inflation. The ECB, on the other hand, maintained its monetary policy unchanged but highlighted the strength of economic growth, confident that it will end up boosting inflation.

The upcoming week will be the last one of the year to offer some relevant data, with EU November inflation and US Q3 GDP final revision outstanding. Yet unless the outcomes diverge from forecasts, they will pass by without affecting the pair.

Political headlines, on the other hand, are a totally different matter, particularly those coming from the US, as the tax reform is losing adepts among Republican Senators, and the fading enthusiasm over its approval will likely result weigh on the greenback. These days, worth keeping an eye on US equities, as the multi-year rally to record highs could suffer a major setback on profit-taking.

Technically, the failed attempt of the EUR/USD pair to surpass 1.1870 has been a major hit for bulls, as the level hasn't been surpassed now for two weeks in-a-row. The weekly bottom was set at 1.1717, a couple of pips above the relevant low set on November 21st at 1.1712, making of the area quite a relevant support for these upcoming days.

Weekly basis, technical readings lean the scale towards the downside, as the price was unable to regain ground above a flat 20 SMA, while the Momentum indicator maintains its bearish slope within negative territory. The RSI indicator in the mentioned chart lacks directional strength at 56, while longer-term moving averages head south, but below the current level. In the daily chart,  technical readings also favor a downward extension for the upcoming days, as intraday attempts to surpass the 20 and 100 SMAs, where unsustainable. Both moving averages, however, stand pat, without directional strength, a clear sign of the ongoing range trading. Technical indicators in this last time frame have turned horizontal within bearish territory.

The pair is currently trading mid-way between its weekly range, also around the 23.6% retracement of its latest daily decline, which adds to the bearish case for the upcoming days. The immediate support is the mentioned 1.1710 region, followed by 1.1660. A break below this last could lead to a test of November low at 1.1550. An immediate resistance is the 1.1800/30 price zone, followed by the stronger 1.1870 area. Beyond it the pair could turn bullish, moreover it somehow it settles above 1.1930.

The FXStreet Forecast Poll shows that sentiment favors the greenback for these upcoming days, but just marginally. In the case of the EUR/USD, the pair is seen on average at 1.1753 for the upcoming day, with the most pessimistic being 1.1400, and the most optimistic 1.1950. The number of bears stands at 47%, well below previous 79%, probably as a consequence of a disappointing Fed. Bears remain side-lined in the longer perspectives, with bulls being the majority in the monthly view, and the pair seen neutral quarterly basis. In this last time frame, there's a quote wide target´s range, from 1.1247 to 1.2516, but the larger concentration being around 1.1600. The overview chart shows that there's no clear trend ahead, although as time goes by, a possible upward move is starting to show up.