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EUR/USD Daily Forecast – Euro Remains Rangebound Above 1.10 Handle

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US Consumer Confidence Figures Slightly Softer than Expected

Consumer confidence in the United States declined for a fourth straight month with a reading of 125.5 for November compared to 126.1 in the prior month.

The figures suggest growth in the fourth quarter will be weak although there is general optimism for early next year and that holiday spending will be strong.

The release was slightly below analyst expectations and therefore did not have much of an impact on the exchange rate. There are several data releases scheduled during the North American session today. However, similar to the consumer confidence release, unless there is a significant deviation from the analyst estimate, EUR/USD is not likely to fluctuate much on the back of them.

Further, with the several market closures starting on Thursday, in observation of the Thanksgiving holiday, volatility is likely to decrease even further.

Technical Analysis

EUR/USD has been trading in a tight range between roughly 1.1005 and 1.1025 since the European open on Monday. The pair is under a bit of pressure in the early day today, but it would be surprising if the downside caught momentum.

I think a big level for EUR/USD falls at 1.0989. This marks the current November low. There will likely be some stops accumulated below it, but the question remains if the markets will make a run for those stops or if buyers will try and defend the area.

The pair trades heavy overall, despite the low volatility. Yesterday, buyers failed to protect a support area that consists of a horizontal level as well as a rising trendline that originates from the October lower.

EURUSD 4-Hour Chart
EURUSD 4-Hour Chart

The upside seems quite limited. A big hurdle will be 1.1025 which has capped the upside several times already. If it manages to get above there, there is a confluence of resistance at 1.1047. This reflects the 50 and 100 moving averages on a 4-hour chart.

Considering the holiday this week, the current conditions are probably suitable for short-term traders. However, it doesn’t seem to make sense establishing a swing position at this stage. As such, the pair may struggle to follow through even if it makes a range break in the session ahead.

Bottom Line

  • EUR/USD trades in a tight 20 pip range in the early week

  • With the holiday in the second half of the week, a substantial move in the pair appears unlikely.

This article was originally posted on FX Empire

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