- EURUSD has been fluctuating in a tight range since the beginning of the week.
- Near-term technical outlook points to a loss of bullish momentum.
- ECB President Christine Lagarde's comments failed to help the Euro.
EURUSD has been struggling to make a decisive move in either direction and fluctuating in its weekly range above 1.0300 ahead of the weekend. The near-term technical outlook shows that buyers are losing interest and the pair could extend its downward correction toward 1.0250.
While speaking at the Frankfurt Financial Conference, European Central Bank President (ECB) Christine Lagarde reiterated that they expect to raise rates further to levels needed to ensure that inflation returns to the 2% medium-term target. "It is appropriate that the balance sheet is normalized in a measured and predictable way," Lagarde added and didn't allow the Euro (EUR) to gather strength.
Later in the day, October Existing Home Sales data will be featured in the US economic docket. On Thursday, the US Census Bureau reported that Housing Starts and Building Permits declined by 4.2% and 2.4%, respectively, in October. With these figures reminding investors of the downturn in the housing market, the US Dollar (USD) lost its bullish momentum and helped EURUSD limit its losses.
Existing Home Sales are forecast to fall by 0.1%. A significant drop in this data could cause the USD to come under bearish pressure ahead of the weekend and open the door for a rebound in EURUSD.
Meanwhile, US stock index futures trade modestly lower on the day. In case Wall Street's main indexes turn south after the opening bell, EURUSD could find it difficult to gain traction and vice versa.
EURUSD Technical Analysis
The Relative Strength Index (RSI) indicator on the four-hour chart is edging lower toward 50 and EURUSD is trading below the 20-period Simple Moving Average (SMA), suggesting that buyers are losing interest in the pair. Additionally, the pair is yet to return within the ascending regression channel after having dropped below it on Thursday.
On the downside, 1.0300 (psychological level, static level) aligns as interim support ahead of 1.0250 (50-period SMA, Fibonacci 23.6% retracement of the latest uptrend). In case the latter support fails, sellers could take action and drag the pair lower toward 1.0200 (psychological level).
Initial resistance is located at 1.0400 (psychological level, static level) before 1.0450 (end-point of uptrend) and 1.0500 (psychological level).
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 stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.