EUR/USD Drops From Resistance Zone As USD Bounces From Monthly Lows

US DOLLAR BOUNCES FROM MONTHLY LOWS AS POST-FOMC EQUITY SELL-OFF CONTINUES

The US Dollar is catching a bounce after setting a fresh monthly low yesterday, and this could be a bit of a reprieve for USD bulls ahead of the holidays. Next week brings Christmas on Tuesday, and the week after brings New Years. This means that next week will likely be punctuated by low-liquidity across Western markets, and this can bring on an especially dangerous environment given the volatile nature of some of the themes currently in the headlines. US stocks continued their descent yesterday, and a key area on the S&P 500 chart appears to be trying to help cauterize the lows. This comes in at the 50% marker of the post-election move in the index, taken from the overnight low on the night of the US Presidential election in 2016 up to the high that was set around the Q4 open.

S&P 500 DAILY PRICE CHART: SUPPORT POTENTIAL AROUND 50% OF THE POST-ELECTION MOVE

(Click on image to enlarge)

spx500 daily price chart

LIGHT ECONOMIC CALENDAR AHEAD

Given the holiday next week, the economic calendar is especially light. Comments from BoJ Governor Kuroda come out on Tuesday night, and Thursday brings Consumer Confidence numbers out of the US. European inflation numbers are due on Friday morning and this is followed shortly-after by the release of US Trade balance figures. Of the group, it would appear that the release of preliminary inflation data out of Europe would be the high-point; as the ECB has recently announced an end to bond buying via the bank’s QE program; and any signs of strength in inflation could be met with a bullish response in the single currency.

DAILYFX ECONOMIC CALENDAR: HIGH-IMPACT EVENTS FOR THE WEEK OF DECEMBER 24, 2018

(Click on image to enlarge)

DailyFX Economic Calendar High Impact

EUR/USD SOFTENS FROM KEY RESISTANCE ZONE

Yesterday’s session saw EUR/USD move-up to its highest level in six weeks, trading into a key zone of resistance that’s been in play for most of Q4. The area that runs from 1.1448-1.1500 was initially supported around the October open, but prices soon slid below and tested that zone for resistance multiple times in the month of November. The price of 1.1448 is the 50% marker of the 2017-2018 bullish run, and the 1.1500 psychological level caps the top-end of the zone while also functioning as the November swing-high. A topside break through this zone would bring on fresh two-month highs going into year-end, and this is a scenario that could soon re-open the door for bullish strategies in the pair.

1 2 3
View single page >> |

Disclosure: Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.