Technical Bias: Neutral 

Key Takeaways

  • Euro is consolidating in a range against the US dollar and waiting for a catalyst for a break.
  • A break higher looks more feasible in the short term considering the EURUSD pair is trading above a key moving average.
  • EURUSD support seen at 1.3350 and resistance ahead at 1.3420.

The Euro despite weak economic releases during this past week managed to hold ground against the US dollar which increases the possibility of a move higher in the short term.

Technical Analysis

There is a very critical triangle forming on the 4 hour timeframe for the EURUSD pair, which is respected by the pair time and again. Recently, the pair climbed towards the triangle resistance area, but failed to break the same and headed back towards the 100 simple moving average (4H). The most important point to note here is that the pair has managed to close above the 50% Fibonacci retracement level of the last drop from the 1.3446 high to 1.3330 low. Moreover, the pair is trading above the 50 SMA (4H), which might provide a reason for the Euro buyers to take the pair higher in the short term. If the pair breaks the triangle resistance area, then ideal target after the break should be around the 1.236 extension level at 1.3473. Any further gains should see sellers around the 1.3510 resistance area.

Chart

Alternatively, there is a chance that the pair might drop from the current levels. In that situation, the 50 SMA (4H) could provide support, followed by the triangle support area around the 1.3350 level. If the pair breaks the triangle and moves lower, then a new low below the 1.3330 low would be possible.

Euro Zone Trade Balance

The Euro zone trade balance data will be published later during the London session by the Eurostat, which might impact the Euro moving ahead.