The Euro is edging higher on Friday in a lackluster trade as investors prepare for the extended Christmas holiday weekend. The single currency is trading in a tight range for the sixth straight session, suggesting investor indecision and impending volatility. The major players are on the sidelines so we’re not looking for any trend-changing events although we could see a rogue move before the close.
At 17:00 GMT, the EUR/USD is trading 1.06242, up 0.0025 or +0.23%. The Invesco CurrencyShares Euro Trust ETF (FXE) is at $98.00, up $0.19 or +0.19%.
There were no major economic reports out of the Euro Zone on Friday. However, in the U.S., a report showed consumer spending barely rose in November, while annual inflation increased at its slowest pace in 13 months, but demand is probably not cooling fast enough to discourage the Federal Reserve from driving interest rates to higher levels next year.
Also capping gains was Thursday’s stronger than expected U.S. economic data. It also cast doubt on the idea of a Fed pause.
The first report showed the number of Americans filing new claims for unemployment benefits increased less than expected last week, pointing to a still-tight labor market.
A second report said the U.S. economy rebounded in the third quarter at a pace faster than previously estimated.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 1.0576 will change the main trend to down. A move through 1.0736 will signal a resumption of the uptrend.
The nearest resistance is a minor pivot at 1.0656. The major resistance is a 50% level at 1.0943. The closest support is a minor pivot at 1.0590. A second support level comes in at 1.0513.
Daily Swing Chart Technical Forecast
Trader reaction to the pivot at 1.0590 will determine the direction of the EUR/USD into the close on Friday.
Bullish Scenario
A sustained move over 1.0590 will indicate the presence of buyers. The first upside target is 1.0656. Look for sellers on the first test of this level. Overtaking it, could trigger an acceleration to the upside.
Bearish Scenario
A sustained move under 1.0590 will signal the presence of sellers. The first target is the main bottom at 1.0576. A trade through this level will change the main trend to down with 1.0513 the next target.
