EUR/USD Price Forecast: Bulls losing interest

EUR/USD Current price: 1.0543

• German inflation was softer than anticipated in November, according to preliminary estimates.
• The United States markets will remain closed amid the Thanksgiving Holiday.
• EUR/USD consolidates within a limited range, no signs of directional strength.

The EUR/USD pair hovers around 1.0540 on Thursday, not far below its daily opening and confined to a tight trading range. The pair peaked at 1.0587 on Thursday, as the US Dollar shed ground following mixed United States (US) data, anyway showing the economic resilience of the world’s largest economy.  

Profit-taking ahead of the long weekend in the US also took its toll on the Greenback. US markets will remain closed on Thursday amid the Thanksgiving holiday and are due to close early on Friday.

Meanwhile, European equities trade in the green, helping keep US futures afloat. Still, action across stock markets is restricted.

Other than that, the Eurozone published the November Economic Sentiment Indicator, which improved from 95.7 in October to 95.8. Consumer Confidence in the same period, however, deteriorated to -13.7 from the previous -12.4

Additionally, Germany published the preliminary estimates of the November Harmonized Index of Consumer Prices (HICP). Annual inflation was up 2.4%, matching the October reading and below the 2.6% anticipated by market participants. The monthly reading printed at -0.7%, down from the previous 0.4% and below the -0.5% expected.

EUR/USD short-term technical outlook

The EUR/USD pair trades at the upper end on Wednesday gain, losing some ground on a daily basis but without clear directional momentum. In the daily chart, the pair remains below a firmly bearish 20 Simple Moving Average (SMA), which provides dynamic resistance at around 1.0625. The longer moving averages remain directionless, far above the shorter one, while technical indicators head nowhere within negative levels, skewing the risk to the downside.

The 4-hour chart shows bulls are losing interest. EUR/USD develops below a bearish 100 SMA, while the 20 SMA loses upward strength below the current level. Technical indicators, in the meantime, remain within positive levels but without clear directional strength. A break through 1.0510 should open the door for another leg south, albeit the US holiday will likely limit action until the Asian opening.

Support levels: 1.0510 1.0475 1.0425

Resistance levels: 1.0585 1.0625 1.0660