EUR/USD Daily Forecast – Euro Pulls Back in the Early Week

EUR/USD Faced Selling Pressure from Resistance on Monday

The 200-period moving average on a 4-hour chart capped the recover rally in EUR/USD on Monday. There isn’t a lot of downside momentum, however, and I don’t see enough evidence that a major top is in.

A Light Economic Calendar this Week Suggests a Range

What seems like the only significant data release this week are the GPD numbers from the United States. They are scheduled to be reported on Thursday.

The pair is likely to see more volatility next week as two events stand the move the pair. The ECB meeting next Thursday, and US employment figures the next day.

German consumer survey results and German import price were reported to fall short of analyst expectations today. The early day release did not have a significant impact on the currency pair.

In early North American trading, the Conference Board will report Consumer Confidence figures. The data release typically does not have a sustained impact on the exchange rate.

Technical analysis

EURUSD 4 Hour Chart

As mentioned, resistance on the 4-hour chart capped the earlier rally in EUR/USD. This area between roughly 1.1210-1.1220 remains a hurdle in the session ahead.

EURUSD Hourly Chart

The hourly chart shows quite a bit of downside support. The 200 and 100-period moving averages come into play. Slightly below them is a horizontal level at 1.1170.

I consider support at 1.1150 as a major level as it held several dips last week.

EURUSD Daily Chart

On a daily chart, EUR/USD seems to be stuck in a range. The chart further shows the importance of 1.1150 as it held the pair higher on a daily basis last week. I see upside range resistance at 1.1259. It not only reflects a horizontal level but also intersects with the upper bound of a downtrend channel. This channel has contained price action for most of the year.

Considering that I’ve taken the stance that the pair will range this week, I’m not seeing anything interesting in the pair at the moment.

I certainly don’t see the pair breaking down this week. At the same time, the overhead resistance confluence at 1.1259 looks too strong to try and front run a break.

Perhaps a better pair to consider if trying to take advantage of the dollar pull back is USD/CHF. Because this pair has a much more established trend, as it’s been trending lower since late April, it’s seems a safer bet. Just keep in mind it’s currently supported by its 100-day moving average.