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EURUSD Price Analysis: Stuck in a Short-Term Range

EURUSD Price Analysis: Stuck in a Short-Term Range

Nick Cawley, Strategist

EURUSD – Price, Chart and Technical Analysis

  • EURUSD remains stuck near its 14-month low.
  • Euro-Zone data calendar clear for the first-half of next week.

The latest IG Client Sentiment Indicator shows how retail are currently positioned in EURUSD - 57.6% long - and how daily and weekly changes can affect trading decisions.

The DailyFX Q3 forecasts and analysis of USD and EUR are available to download here.

EURUSD Building a Trading Range

EURUSD remains near its recent low and is unlikely to break out of a narrow trading range in the short-term. The US dollar is nudging lower after its impressive run-up of late, while the Euro remains weighed down by Turkish contagion fears and elevated Italian bond yields – 10-year Italian bonds yield in excess of 3.10%. The data calendar is quiet for both the Euro and the dollar until the back-end of next week, apart from the FOMC minutes after the Europe close on Wednesday, leaving little to drive the pair.

The US dollar basket (DXY) currently trades marginally lower after its recent surge and may test the 50% Fibonacci retracement level at 95.87. A break below here would open up support around old highs at 95.20.

US Dollar Basket (DXY) Daily Price Chart (November 2017 – August 17, 2018)

EURUSD Price Analysis: Stuck in a Short-Term Range

The daily EURUSD chart below shows the new trading zone between 1.1301, the recent low, and the double-low at 1.1509. Before that the 50% retracement level at 1.1448 needs to be respected and may prove difficult to break. The RSI indicator is coming out of oversold territory but the downtrend from late-July remains in place.

EURUSD Daily Price Chart (December 2017 – August 17, 2018)

EURUSD Price Analysis: Stuck in a Short-Term Range

The four-hour EURUSD chart also points to a tight trading range with additional barriers to the upside provided by the 20- and 50-day moving average with the latter coinciding with the 50% retracement level.

EURUSD Four-Hour Chart (July 23 – August 17, 2018)

EURUSD Price Analysis: Stuck in a Short-Term Range

If you are new to foreign exchange, or if you would like to update your knowledge base, download our New to FX Guide and our Traits of Successful Traders to help you on your journey.

What’s your opinion on EURUSD? Share your thoughts with us using the comments section at the end of the article or you can contact the author via email at Nicholas.cawley@ig.com or via Twitter @nickcawley1

--- Written by Nick Cawley, Analyst

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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