- EUR/USD has gone into a consolidation phase around 1.1600 ahead of key events.
- 1.1570 is the last line of defence before EUR/USD can target 2021 lows.
- Euro bulls are hoping for a hawkish ECB surprise.
EUR/USD has been moving up and down in a tight channel around 1.1600 since Tuesday with investors gearing up for the European Central Bank's (ECB) policy announcements and high-tier data releases from the US.
Although the ECB is widely expected to leave its key rates unchanged on Thursday, President Christine Lagarde could battle against the market pricing of a 10 basis points rate hike by next summer. Moreover, the worsening economic outlook in the euro area is likely to cause ECB policymakers to keep a dovish tone. In short, it would be a big surprise if the ECB were to take a hawkish step and help the common currency find demand.
Earlier in the day, the data from Germany showed that the GfK Consumer Confidence Index improved to 0.9 in November from 0.4 in October but this reading had little to no impact on the shared currency's performance against the greenback.
The US economic docket will feature September Durable Goods Orders and Trade Balance reports. Ahead of Thursday's third-quarter GDP reading, however, these data are not expected to trigger a meaningful reaction.
Durable Goods Orders Preview: Five scenarios to trade the event with EUR/USD.
In the meantime, market participants could keep a close eye on technical levels to determine short-term trading opportunities.
EUR/USD technical analysis
The Relative Strength Index (RSI) indicator on the four-hour chart is moving sideways a little below 50, reflecting EUR/USD's indecisiveness in the near term.
The initial support on the downside is located at 1.1600 (psychological level, 100-period SMA). The pair dropped below that level on Wednesday but didn't have a difficult time recovering. A daily close below 1.1600, however, could attract sellers and cause the pair to slide toward 1.1570 (static level) and 1.1525 (2021 low).
On the upside, resistance at 1.1620 (Fibonacci 23.6% retracement September downtrend, 50-period SMA) stays intact ahead of 1.1650 (200-period SMA) and 1.1670 (Fibonacci 38.2% retracement).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.