EUR/USD Forecast: Euro struggles to break out of tight range
- EUR/USD continues to fluctuate in a narrow channel below 1.0800.
- The pair could start stretching lower in case risk mood sours.
- The US economic docket will not offer any high-impact data releases on Tuesday.
EUR/USD failed to gather directional momentum and closed the first day of the week virtually unchanged as trading conditions remained thin due to the US Presidents' Day holiday. The pair continues to move sideways below 1.0800 early Tuesday.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.15% | 0.18% | 0.21% | 0.05% | 0.16% | -0.02% | 0.27% | |
| EUR | -0.15% | 0.01% | 0.07% | -0.11% | 0.01% | -0.17% | 0.12% | |
| GBP | -0.18% | -0.03% | 0.03% | -0.14% | -0.02% | -0.20% | 0.09% | |
| CAD | -0.21% | -0.07% | -0.03% | -0.16% | -0.05% | -0.23% | 0.07% | |
| AUD | -0.03% | 0.11% | 0.13% | 0.17% | 0.11% | -0.07% | 0.22% | |
| JPY | -0.15% | -0.01% | 0.06% | 0.05% | -0.09% | -0.18% | 0.13% | |
| NZD | 0.03% | 0.16% | 0.20% | 0.24% | 0.07% | 0.17% | 0.30% | |
| CHF | -0.29% | -0.14% | -0.10% | -0.07% | -0.24% | -0.14% | -0.30% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
US Stock index futures trade in negative territory in the early European session on Tuesday. In case Wall Street's main indexes open in the red and stretch lower after the long weekend, the US Dollar (USD) could stay resilient against its rivals and make it difficult for EUR/USD to gain traction.
The US economic docket will not feature any high-impact data releases that could influence EUR/USD's action in the near term. The US Treasury will hold 52-week and 6-month note auctions later in the day.
In its monthly report published on Monday, Germany's Bundesbank said that Germany is likely in recession now, citing weak external demand, muted consumption and cautious investments.
On Wednesday, the European Commission will release the preliminary Consumer Confidence data for February. In the American session, the Federal Reserve will release the minutes of the January policy meeting. On Thursday, Manufacturing and Services PMI data from the Eurozone, Germany and the US will be scrutinized by market participants.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart retreated toward 50 after rising to 60 on Monday, highlighting a loss of bullish momentum. On the upside, the 100-period Simple Moving Average (SMA) acts as immediate resistance at 1.0780 before 1.0800 (psychological level, Fibonacci 23.6% retracement of the latest downtrend). In case EUR/USD manages to flip the latter into support, it could target 1.0840 (200-period SMA) next.
On the downside, first support is located at 1.0750 (50-period SMA) before 1.0725 (static level) and 1.0700 (end-point of the downtrend, psychological level).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
