During a strong sell-off late last week, EURUSD derived support around the 100-DMA which capped the downside pressure on Monday as well. The decline was mostly due to a pickup in dollar demand on the back of decent US GDP and PCE data – the figures mostly came in line with expectations and helped to further ease market concerns over a possible recession in the United States.
Today, the pair once again encountered a local resistance around 1.11 and turned negative in the daily charts, after a limited recovery overnight. The common currency lacks the directional impetus amid thin pre-holiday trading. As a reminder, after today’s shortened session, many Western stock markets will be closed on Wednesday for Christmas. Amid low liquidity, EURUSD could settle in a tight range between the 1.11 handle and the 100-DMA around 1.1060.
So far, it looks like the potential for a break below the moving average is limited. At the same time, chances of a break above 1.11 are low, as risk sentiment looks subdued now, with most equity markets show mixed dynamics amid the lack of drivers and significant news. In a wider picture, the common currency remains in a downtrend since early-2018, when the pair was rejected from highs above 1.25. as monthly timeframes suggest, to break this trend, the euro needs to retrace its losses to at least 1.16.
Today, the pair once again encountered a local resistance around 1.11 and turned negative in the daily charts, after a limited recovery overnight. The common currency lacks the directional impetus amid thin pre-holiday trading. As a reminder, after today’s shortened session, many Western stock markets will be closed on Wednesday for Christmas. Amid low liquidity, EURUSD could settle in a tight range between the 1.11 handle and the 100-DMA around 1.1060.
So far, it looks like the potential for a break below the moving average is limited. At the same time, chances of a break above 1.11 are low, as risk sentiment looks subdued now, with most equity markets show mixed dynamics amid the lack of drivers and significant news. In a wider picture, the common currency remains in a downtrend since early-2018, when the pair was rejected from highs above 1.25. as monthly timeframes suggest, to break this trend, the euro needs to retrace its losses to at least 1.16.