EUR/USD analysis: confined to a well-limited range

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1804

The common currency found demand on dollar's weakness.
EU core inflation disappoints, down 0.1% in the month.

The EUR/USD pair is up for the day as the greenback was unable to extend its last week's gains, with the pair trimming in thin Monday's trading all of Friday's losses. European currencies are the best performers on the back of dollar's weakness, and the common currency is up in spite of disappointing EU data. Inflation for the whole region was up 0.1% in November, with the annual reading resulting at 1.5%, both matching the previous and the expected figures. The core readings, however, were worst-than-expected with the monthly figure down by 0.1% in the month, and the year-on-year reading up by 0.9%, against the expected 1.0%. There were no macroeconomic news in the US, with the main theme there being the tax reform. Republicans from the House and the Senate agreed on Friday on a final version of the bill that is expected to pass the Congress this week. Stocks rally to record highs on the news, but dollar bulls remained side-lined. This Tuesday, the macroeconomic calendar will remain light, with the EU releasing construction figures, and the US November housing data.

The pair maintains a neutral stance from a technical point of view, as in the 4 hours chart, the price continues hovering around horizontal moving averages, while the price currently stands around the 38.2% retracement of this month's decline. Technical indicators in the mentioned chart have entered positive territory, with the Momentum heading higher, but the RSI losing strength around 55. The range defined in the previous two weeks has it base around 1.1715 and the top in the 1.1870 price zone. A clear break of any of those extremes is required to see some directional strength, something quite unlikely to be trigger by macroeconomic releases this week.

Support levels: 1.1750 1.1715 1.1660

Resistance levels: 1.1830 1.1870 1.1900

View Live Chart for the EUR/USD

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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