EUR/USD Forecast: limited directional strength

Valeria Bednarik FXStreet

The EUR/USD pair consolidates in light trading this Monday, with a holiday in Japan, and little macroeconomic data ahead. So far, the pair has fell down to 1.0515, from where it recovered up to 1.0555, trading near this last after the release of German production and trade figures. According to official releases, Industrial Production rose by 0.4% in November, missing expectations of 0.7%, when compared to October. In the same month, the Trade Balance printed a surplus of €21.7B, better than the €20.8B expected, with monthly imports up by 3.5% and exports by 3.9%. I the US session, FED's members Rosengren and Lockhart will probably take center stage.

From a technical point of view, the 4 hours chart shows that the price remains below the 23.6% retracement of the November/January slide at 1.0665, while in the 4 hours chart, the price is battling between a bullish 20 SMA and a bearish 200 SMA. Additionally, the Momentum indicator is entering bearish territory, coming straight from overbought territory, while the RSI consolidates around 54, indicating no clear directional strength.

There's no trigger ahead that can move the price firmly in one certain direction, although an acceleration through the mentioned Fibonacci resistance should lead to an extension towards 1.0600/20. Below 1.0500 on the other hand, the pair can ease down to 1.0440/50, a strong static support.

View live chart of 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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