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EURUSD Price: Short-Term Rally May Struggle to Find Traction

EURUSD Price: Short-Term Rally May Struggle to Find Traction

2019-01-02 09:00:00
Nick Cawley, Strategist
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EURUSD Price, News and Analysis

  • The euro opens the year marginally higher with charts showing a supportive backdrop against the US dollar.
  • US government shutdown weighs on the USD.

The DailyFX Q1 2019 Trading Forecasts and Guides are now available to download for free.

EURUSD Making an Early Move Higher

The short-term EURUSD set-up suggests higher prices ahead with the break above the 20- and 50-day moving averages at the end of last aiding the move higher. The pair now target the 1.1508 level, the November 6 high print, before the 200-day moving average at 1.1555 comes into play. Above here, the October 16 high at 1.1622 is the next target. A break below 1.1420 would open the way back to the 20- and 50-day moving averages between 1.1370 and 1.1390.

EURUSD Daily Price Chart (May 2018 – January 2, 2019)

EURUSD Price: Short-Term Rally May Struggle to Find Traction

US Dollar Stymied by Government Shutdown

The US dollar remains weak as 2019 starts as investors continue to price-in lower US interest rate expectations with the market now implying no rate hikes in 2019. In addition, the partial US government shutdown continues to weigh on the greenback as President Trump continues to look for funding for the Mexican border wall. The USD is nearing the 200-day moving average at 94.91 which should provide strong short-term support, although a break and close lower would leave the September 2018 lows around 93.30 as the next level of support.

US Dollar Basket Daily Price Chart (February 2018 – January 2, 2019)

EURUSD Price: Short-Term Rally May Struggle to Find Traction

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Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on EURUSD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.

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