EUR/USD daily overview

FX:EURUSD   Euro / U.S. Dollar
EUR/USD showed no changes to its price level on Friday, as it remained fluctuating around the 200-hour SMA slightly above the 1.23 mark.

The current positioning of the pair suggests that the Euro could edge lower this week in order to approach the bottom boundary of the senior channel, the weekly S1 and the 38.20% Fibo circa 1.2235. In terms of today, technical indicators are tended northwards that points to a possible push upwards in this session. However, the combined resistance of the 100-hour SMA and the 23.60% Fibo near 1.2360 should provide strong resistance for the pair, especially when the lack significant fundamentals cannot add additional strength to this bullish movement.

Meanwhile, it is unlikely that the pair falls down to its nearest resistance of 1.2240.

The Euro was fluctuating in the 1.2340/1.2290 range on Tuesday, thus continuing its general movement sideways which began following weak US employment data last Friday.

The first part of today is likely to remain quiet, as traders are awaiting US inflation report released at 1230GMT. Thus, the Euro could trade in a narrow range between the 55-, 100– and 200-hour SMAs during this time. Resistance is likewise reinforced by the weekly PP.

A breakout is likely to determine the pair’s subsequent direction until Wednesday morning. In case 1.2345 surrenders, the Euro should try pushing for the 1.24 area.

Conversely, the prevalence of strong bearish sentiment could result in a test of the 1.2240 territory where the weekly S1, the 38.20% Fibo retracement and the senior channel are located.

The first part of Tuesday’s trading session was uneventful, as the Euro was fluctuating in a narrow range against the US Dollar. The market sentiment changed notably mid-session when the US published its CPI. The data matched expectations, thus alleviating the risk of Fed hiking interest rates at a faster pace.

The US Dollar lost some ground against the Euro following this report, as well as responding to events involving the US Secretary of State. As a result, the Greenback fell 0.60% within a couple of hours.

Analysts expect that the pair’s rally could continue during the following sessions up to the medium-term channel circa 1.2460. However, given the massive surge yesterday, bulls are likely to exhaust their positions for a couple of hours or even longer, thus allowing for a correction closer to the 1.2450 mark.

The Euro managed to remain near 1.24 during the Asian session early on Wednesday, thus trying to gain enough strength to surpass the weekly R1 at 1.2410.

Bears saw an opportunity to push the rate lower—a move which was strengthened by rather dovish comments from the ECB President Draghi during the first part of the day. The subsequent fall, however, failed to match support set by the 55– and 200-hour SMAs and the 23.60% Fibo at 1.2358.

It is likely that this barrier pressures the rate higher during this session, especially when a strong support cluster near 1.2355 is apparent on the four-hour chart, as well.

Gains are likely to be capped near the one-month high of 1.2440. The prevalence of this scenario would push the Euro closer to a medium-term channel circa 1.2460.

Contrary to expectations, the common European currency was guided by bears on Thursday.

This strong momentum south allowed the pair to dash through the combined support of the 55-, 100– and 200-hour SMAs and the weekly PP. The second part of the day showed high volatility in both directions which allayed considerably during the Asian session early today.

It seems that bulls could be ready to push the rate away from its two-week low of 1.2284 and regain some of its positions lost yesterday. The Euro is likely to aim for the resistance cluster formed by the aforementioned SMAs and the 23.60% Fibo retracement near the 1.2360 area.

In case of favourable US Building Permits, this level might even be breached to the upside, thus setting 1.2380 as a daily high.
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