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The EUR/USD has paused after its sell-off and is currently moving sideways on shorter time-frames. Ultimately there is no clear trend and the pair is bound – above and below - by tough lines of support and resistance, hemming it in. Prices are expected to be stuck within this narrow corridor, in the short term. The low volatility, however, could be followed by a possible sudden breakout.
If we look to the mid-term for direction it remains in an up-trend, biasing forecasts to the upside. The 50-day at 1.3655, and 200-day at 1.3674, however, are major obstacles, and even if cleared there is further resistance from the major trend-line down from the 2008 highs at around 1.3700, leaving little scope for gain, (except a small move up to 1.3655 if the current day highs at 1.3625 are breached).
The current move down begun on Thursday could be an incomplete zig-zag with its final c leg still to come. A break below the 1.3588 lows would provide bearish confirmation, however the monthly pivot at 1.3564 is a major obstacle to full extension.