EUR/USD analysis: at the lower end of the weekly range

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1361

Dollar recovers alongside Wall Street after Monday's sell-off, relief could be temporal.
Thin holiday-related conditions to extend into the first days of January.

Little happened in the FX sphere in these last couple of days, with only Japanese markets opened in Christmas and only US markets opened this Wednesday, amid the observance of the Boxing Day in Europe and some Asian countries. Wall Street rebounded nicely after Monday's steep sell-off, with oil prices also recovering sharply. The EUR/USD pair, however, remained stuck to the 1.1400 level, contained ever since the week started between 1.1354 and 1.1438, with not much hopes that the upcoming day will be something different. There were no macroeconomic releases coming from Europe, while US data was mixed as the S&P Home Price Index came in at 5.0% YoY in October, better than the 4.9% expected, while the Richmond Fed Manufacturing Index for December fell 8 points following an advance of 14 in the previous month. Aiding the greenback in the US afternoon, were comments from a White House adviser, Kevin Hassett, who said that Powell's job as head of the Federal Reserve is not in jeopardy.

This Thursday, activity will return to almost normal, as next week will also start with a two-day holiday, with thin volumes expected to prevail until the first days of January. Anyway, the ECB will publish its Economic Bulletin, while the US will offer Consumer Confidence, New Home Sales and the usual weekly unemployment figures.

The 4 hours chart shows that the pair is finding short-term support around its 200 SMA, around 1.1360, also the base of the weekly range, while a mildly bearish 20 SMA caps the upside around 1.1410. Technical indicators hold below their midlines without directional strength, all of which left a neutral stance. The pair also holds near its yearly low and below the 23.6% retracement of its yearly slump, this last at 1.1545, which, long-term, keeps the risk skewed to the downside. The pair is heading into the Asian opening near the base of the mentioned weekly range, with the greenback having chances of recovering further amid the improved mood among equities' traders, that anyway, could be temporal.

Support levels: 1.1360 1.1315 1.1280

Resistance levels: 1.1440 1.1480 1.1510

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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