EUR/USD Forecast: Quiet consolidation ahead of critical events

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1070

Trade tensions and central banks’ upcoming decisions keep investors in cautious mode.
German trade surplus surpassed the market’s expectations in October, up to €20.6B.
EUR/USD reversing Friday’s losses scope to retest the 1.1100 price zone.

The EUR/USD pair is trading marginally higher this Monday, with the greenback shedding some of the ground gained on Friday. The market’s mood is cautious ahead of several critical events that will take place this week, starting with the US Federal Reserve´s and the ECB´s monetary policy meetings.

Also, the UK will head to the polls on Thursday, and the outcome should define the future of Brexit. Finally, the US has planned the next round of tariffs on Chinese goods for December 15, which means that, if a trade deal is not achieved ahead of it, tensions are set to escalate and spur risk-aversion.

The week started in slow motion in the data front, as Germany released its October Trade Balance, which posted a trade surplus of €20.6B. Imports in the month were unchanged against a 0.1% decline expected, while exports increased by 1.2%, much better than the -0.3% forecast. The US won’t release macroeconomic data this Monday.

EUR/USD short-term technical outlook

The EUR/USD pair is trading a few pips above a Fibonacci level at 1.1065, the 38.2% retracement of its October rally. The short-term picture is neutral, as, in the 4-hour chart, the pair is trading within directionless moving averages, as technical indicators head nowhere around their midlines. The upside seems limited by sellers aligned ahead of the 1.1100 figure, while buyers will likely defend the 1.1030 level, the 50% retracement of the mentioned rally.

Support levels: 1.1030 1.0985 1.0940

Resistance levels: 1.1090 1.1120 1.1150

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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