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EUR/USD Forecast: Holding Above The Critical Support At 1.1065

Valeria Bednarik - Chief Analyst at FXStreet

EUR/USD Current Price: 1.1092

  • US Durable Goods Order surprisingly fell in November by 2.0%.
  • European macroeconomic calendar to remain empty until next Friday.
  • EUR/USD holding above the critical support at 1.1065, but bounces limited.

The EUR/USD pair peaked at 1.1095 this Monday, up with Wall Street’s opening, recovering from a daily low of 1.1069. Trading was choppy across the board, with the dollar appreciating during European trading hours, but changing course afterward. A dismal US Durable Goods Orders report was initially ignored by the market’s participants, but it later took its toll on the greenback. According to the official release, orders plummeted  2% in November, well below the expected 1.5% advance. Non-defense Capital Goods Orders were up by 0.1%, also below the latest market’s expectation of 0.2%.

New Home Sales, released later in the day, was up by 1.3%, better than the 0.3% decline expected.

There were no macroeconomic releases in Europe, and the calendar will remain empty for the Union until next Friday. The US will release this Tuesday the Richmond Fed Manufacturing Index for December, seen at 9 vs. the previous -1.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair has managed to bounce after another approach to the 61.8% retracement of its December rally at 1.1065, to end the day around the 50% retracement of the same advance at 1.1090. In the 4-hour chart, the pair remains below a bearish 20 SMA that approaches a mild-bullish 100 SMA, this last converging with the daily high.

Technical indicators remain within negative levels without clear directional strength.  The pair has a relevant Fibonacci resistance at 1.1120, while a relevant support comes at 1.1065. Large stops are suspected below this last, and if those are triggered, the pair can near 1.1000 before paring its slump.

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