Eur/usd - page 521
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EUR/USD Consolidates Within A Narrow Range In Thin Trading
Price action in EUR/USD has remained within a 25 point range on Monday as European and American traders are off on bank holiday. A rally ahead of the European open was short-lived with resistance triggering a turn lower.
To the upside, a horizontal level at 1.0462 represents the 2015 low and has been holding the pair lower since the initial break in the middle of the month. Support for the pair since Wednesday has been at 1.0430, defining a clear range for the pair.
Among the majors, the price action has been in the commodity currencies with the Aussie Dollar leading the gainer’s list. AUD/USD recovered from important support that had previously elicited a turn higher in May for a rally that lasted until the US elections. AUD/USD was last seen trading at 0.7201 for a gain of 0.44%.
Among the Euro cross rates, A turn lower last week has snapped a prior six-week winning streak in EUR/JPY. Near-term resistance is seen at 122.63 and after several tests of the level in Asian trading, the pair has turned lower. After two consecutive weekly doji prints in EUR/GBP, the pair turned sharply higher last week. The pair had been consolidating around support at 0.8314 referencing the Brexit spike high. EUR/NZD has turned lower and is on track to post a bearish daily engulfing candle. Important support falls at 1.5080 as the level had triggered a notable turn high in early September, a break would point to a broader pullback after sharp gains in the past two weeks.
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The EUR/USD closed the week at 1.0454. RSI is located slightly below mid-lines while stochastic is moving to negative territoty. Both indicators do not confirm an upward movement. First support is seen at 1.0420 and next at 1.035. Resistances are placed at 1.0500 and 1.0550.
Yesterday, the markets were closed for Boxing Day and time to take a breather and today should start slow but steady as the Year comes to an end.
The currency pair continues to trade below the 10, 50 and the 200-day moving averages that should act as dynamic resistances.
The key levels to watch are: a Fibonacci extension at 1.0666 (resistance), a daily resistance at 1.0622, the 10-day moving average at 1.0458 (resistance), a daily resistance at 1.0462 and the new multi-year low at 1.0352(support).
The economic calender this week is not offering any significant events that could stir the markets. Also along with the Holidays Season we usually witness uninspired trading. Currently the EUR/USD is tradingly slightly changed comparing with last week and is now testing the resistance at 1.0460.
Cheap Euro & Pound? CACIB See EUR, GBP Exchange Rates Lower Compared To Fair Value
CACIB - Both the euro and the sterling are cheap compared to their long-term fair value.
Crédit Agricole Corporate & Investment Bank(CACIB) has identified the European political risks and tapering by the ECB among the four major drivers of the G10 Forex markets next year. The political risks in Europe are from elections and Brexit, however, they are unlikely to break the eurozone.
“We see value in owning EUR/USD downside via 6M risk reversal. Downside risks in GBP/USD should grow again ahead of March’s Brexit trigger,” said Valentin Marinov, head of G10 FX Research at Credit Agricole.
Forecast for the Euro and British Pound for next year
“EUR will bend but not break up under the pressure of Eurozone political risks next year, we expect. Assuming that these risks start abating in H217, investors should increasingly focus on ECB taper and help EUR/USD recover in 9M–12M,” said Marinov.
“The GBP outlook is clouded by political uncertainty and renewed data weakness in 2017. But we believe GBP has overshot on the downside on Brexit and expect a gradual recovery over the very long term,” he added.
Yesterday, the EURUSD went back and forward on a narrow range day but managed to close in the green, near the high of the day, however the currency pair closed within Fridays range, which suggests being slightly on the bullish side of neutral.
The currency pair accomplished to close above the 10-day moving average that now should act as a dynamic support although it continues to trade below the 50 and the 200-day moving averages that should act as dynamic resistances.
The key levels to watch are: a Fibonacci extension at 1.0666 (resistance), a daily resistance at 1.0622, the 10-day moving average at 1.0434 (support), a daily resistance at 1.0462 and the new multi-year low at 1.0352(support).
EUR/USD: Trading with a Downside Bias
EUR/USD is lower in today’s trading, currently holding near the 1.0410 level, down 0.44% from Tuesday’s North American close.
Support on a further move lower is at last week’s low at 1.03510. With the broader uptrend in the dollar still intact, an eventual breakdown below this low is expected, with the next downside target for EUR/USD at the 1.0000 level. The next support derived from the monthly chart does not come into play until 0.96100, which defines the reaction low established in September 2002.
On the upside, resistance is at the November/December lows near 1.05183, which was tested and failed with last Thursday’s intraday move higher and subsequent decline. A sustained move above this level is required to improve the outlook for the pair.
In yesterday’s trading, the Conference Board Consumer Confidence Index climbed to 113.7 in December, up from 109.4 the previous month and well above forecasts calling for 109.0. “The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13-year high, was most pronounced among older consumers,” Lynn Franco, director of economic indicators at The Conference Board, said in a statement.
Today, US Pending Home Sales will be released at 10:00am ET, followed by Jobless Claims on Thursday and Chicago PMI on Friday.
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The EUR/USD pair again is seen below 1.0400 level. The US macro data relesed today was quite disappointing but nevertheless the greenback paired gains. As long as the pair hold below this level the retest of the yearly low at 1.0351 becomes very possible.