EUR/USD Struggles to Trade Back Above Former Support Zone
The opening range for December is in focus for EUR/USD as it appears to be stuck in a narrow range.
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US Dollar Outlook: EUR/USD
The opening range for December is in focus for EUR/USD as it appears to be stuck in a narrow range, but the rebound from the November low (1.0333) may unravel as the exchange rate struggles to trade back above the former-support zone around the April low (1.0601).
EUR/USD Struggles to Trade Back Above Former Support Zone
EUR/USD holds above the weekly low (1.0461) after showing a limited reaction to the ADP Employment report, and the exchange rate may consolidate ahead of the US Non-Farm Payrolls (NFP) report as Federal Reserve officials strike a mixed outlook for monetary policy.
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Fed Governor Adriana Kugler recognized that the central bank is ‘in the process of moving policy toward a more neutral setting’ while speaking at the Detroit Economic Club, while St. Louis Fed President Alberto Musalem made the case for ‘a patient approach that focuses on returning inflation sustainably to 2%’ while delivering a speech at the Bloomberg and the Global Interdependence Center Symposium.
US Economic Calendar
In light of the recent comments, it remains to be seen if the Federal Open Market Committee (FOMC) will respond to the 146K rise in ADP Employment as the US economy shows little signs of a looming recession, and the Non-Farm Payrolls (NFP) report may lead to a dissent within the central bank as the update is anticipated to show a 200K rise in November.
With that said, a positive development may generate a bullish reaction in the Greenback as it curbs speculation for a Fed rate-cut in December, but a weaker-than-expected NFP print may prop up EUR/USD as it raises the scope for lower US interest rates.
EUR/USD Chart – Daily
Chart Prepared by David Song, Strategist; EUR/USD on TradingView
- EUR/USD holds within the range from the start of the week and the exchange rate may continue to track sideways as it struggles to trade back above the former-support zone around the April low (1.0601).
- Nevertheless, a break/close above the 1.0580 (78.6% Fibonacci extension) to 1.0610 (38.2% Fibonacci retracement) region may push EUR/USD back towards 1.0660 (61.8% Fibonacci extension), with the next area of interest coming in around 1.0710 (50% Fibonacci extension).
- At the same time, a break/close below the 1.0448 (2023 low) to 1.0480 (100% Fibonacci extension) zone brings 1.0370 (38.2% Fibonacci extension) on the radar, with a breach below the November low (1.0333) opening up 1.0200 (23.6% Fibonacci retracement).
Additional Market Outlooks
GBP/USD Recovery Vulnerable as Bear Flag Formation Takes Shape
USD/CHF Pullback Faces Positive Slope in 50-Day SMA
USD/CAD Defends Post-US Election Rally to Eye November High
US Dollar Forecast: USD/JPY Gives Back Post-US Election Rally
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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