EUR/USD consolidates below 1.12, headed for weekly losses

Eren Sengezer FXStreet

After falling to a new three-day low at 1.1160 during the NA session opening, the EUR/USD pair has been consolidating its daily losses in a very tight range in the last few hours. As of writing, the pair was trading at 1.1170, losing 0.35% on the day.

The thinning trading volume in the session suggests that investors show no interest in the markets as they get ready for the long weekend. The US Dollar Index, which surged to a weekly high at 97.46, has been moving sideways as well. As of writing, the DXY is at 97.39, up 0.25% on the day.

Earlier in the session, the macro data from the U.S. brought some volatility to the markets as the gross domestic product in the U.S. increased at a 1.2% annual rate compared to the 0.7% growth reported last month. The greenback gained momentum following the data and after last week's heavy losses, the index is about to close the week with gains. In the meantime, the EUR/USD pair which started the week at 1.12, is headed for a negative weekly closing. However, this week's dismal retreat doesn't suggest that a new downtrend is underway, it merely seems as a technical correction of last week's 270 pips rise.

The economic calendar won't be offering any significant data on Monday. Also, the U.S. markets will be closed due to the Memorial Day holiday and it's unlikely to witness any sharp fluctuations or an opening gap.

Technical outlook

The pair could start a deeper correction if it can break below 1.1100 (psychological level/ Fibo 23.6% of April 10 - May 22 rise). Below that level, 1.1055 (20-DMA) and 1.10 (psychological level) could be targeted. On the upside, resistances align at 1.1200 (psychological level), 1.1265 (May 22 high) and 1.1300 (Nov. 9 high).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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