EUR/USD analysis: dollar's weakness preventing EUR's slide

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1740

US Durable Goods Orders and FOMC's meeting Minutes to take center stage.
Despite dollar's demand receded across the board, the common currency remained flat.

Demand for the greenback receded this Tuesday but didn't help much the common currency. The EUR/USD pair ended the day little changed around 1.1740, stuck around the 38.2% retracement of its latest bullish run, amid de absence of a fresh catalyst to drive the pair. There were no fresh news on German's situation after coalition talks failed on Sunday, but the issue kept bulls away from the pair. There was a notable decrease in volume across the FX board, partially due to a scarce calendar, but also due to the upcoming Thanksgiving holiday this Thursday.

There were no macroeconomic headlines coming from the EU, but the US released the Chicago Fed National Activity index, up in October to 0.65 from 0.36 in September, another regional index that beats expectations. Also, Existing Home Sales in the same month rose by 2.0%, to their strongest pace since earlier this summer, according to official data, to a seasonally adjusted annual rate of 5.48 million. Things will be a bit more interesting this Wednesday, with US Durable Goods Orders and the Michigan consumer sentiment index, ahead of FOMC´s meeting Minutes.

Technically, the pair posted a lower low and a lower high daily basis, indicating that the risk remains towards the downside, despite the flat daily close. The fact that the pair remains unable to surpass its 100 DMA adds to the negative sentiment, although in the longer run, a steeper decline is not yet clear. Shorter term, and according to the 4 hours chart, the price settled below a bearish 20 SMA, but held above a horizontal 200 SMA, as technical indicators maintain a neutral stance within bearish territory, barely turning higher, but with limited directional strength. The pair needs to settle above 1.1745, the mentioned Fibonacci level, to be able to extend its recovery, while further slides should be expected below 1.1705, the next Fibonacci support.

Support levels: 1.1705 1.1670 1.1630

Resistance levels: 1.1745 1.1790 1.1830

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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