EUR/USD Forecast: nearing 1.1800, but upward potential limited
- EUR/USD nears 1.1800 on dollar's decreased demand.
- Pair's upward potential limited as long as below 1.1870.
The greenback is down across the board this Monday, quickly reverting the positive momentum it got at the weekly opening. The EUR/USD pair gapped marginally lower and fell down to 1.1737 but quickly changed course, now trading at its highest for the day not far from the 1.1800 threshold. European currencies are the strongest so far, despite local equities are rallying sharply, while safe-haven assets see little directional strength, consolidating around their Friday's closing levels.
Most of EUR's strength comes from shrinking demand for the greenback, with the DXY sharply down after two days of gains. The macroeconomic calendar will be scarce for today, with the only relevant news being EU inflation for November, expected to tick up from previous figures, but to remain well below the ECB's target of 2.0%. The week will see reduced volumes ahead of year-end holidays.
Technically, the EUR/USD pair maintains a neutral stance according to technical readings in the 4 hours chart, as the price keeps hovering around horizontal moving averages, now around the 20 SMA, while technical indicators have extended their bounced from near oversold readings, but the Momentum remains within negative territory while the RSI indicator has entered positive territory, but with limited upward strength and still within neutral territory.
The pair has an immediate resistance at 1.1800, followed by a stronger one around 1.1830, both static levels. Beyond this last, selling interest has been surging around 1.1870, the level to surpass to consider a bullish EUR. Intraday supports are located at 1.1750 and 1.1715, this last being a bearish breakout point.
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.
