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Highlights :
- EUR/USD support getting thoroughly tested and needs to hold to keep outlook neutral to bullish
- A drop below the 11730/11660 zone clears a path to the November low or worse
- Momentum may lack in either direction, though, as volatility continues to be low; but always expect the unexpected
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The key heading into this week remains the same as it was going into last week - EUR/USD needs to hold the ~11730-11660 area and the April trend-line (to a lesser degree), or else it runs the risk of selling off. The support zone has held significance since August. Another hold here is needed to keep the outlook neutral to bullish. The April trend-line is currently in confluence with price support, further cementing its importance.
If buyers can buoy the single-currency and turn it higher, the area around 11876 (just above last week's high) will need to be cleared, along with the trend-line descending down from the September high. This will at least put the euro in position to try and make another swing-high above the 11/27 peak at 11961.
On the flip-side, if EUR/USD fails to hold the aforementioned trend-line and support zone (quickly becoming the risk), then focus will quickly shift towards the November low at 11556 and worse. Below there we would look to the underside trend-line running lower from August as the next potential stopping point.
The bottom line heading into next week is that the euro is again testing big support and thus far it is passing the test (barely), and if buyers don't soon show up in earnest then sellers might. Volatility remains low, and as such it doesn't appear likely we'll see a major move into year-end. However, with that said we still need to be prepared for the unexpected. We'll be taking a closer look at the euro again and other currencies on Wednesday at 10 GMT .
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EUR/USD: Daily
---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
