The Euro continues to trade in a very narrow trading range, with resistance at a mere $1.27189 while support stands at $1.26839 during the early afternoon session. The currency pair, which witnessed a sell-off post the German IFO Business Confidence Index report yesterday, recovered rather well after dismal U.S. Pending Home Sales data put significant pressure on the dollar.
The Euro, after opening higher in the morning session wasn’t able to sustain itself at higher levels, now forming lower highs, which is a bearish indicator. There is heavy speculation in the markets that the European Central Bank will unleash its Quantitative Easing program much earlier than planned, as most economic indicators are becoming increasingly bearish for the Euro-zone.
Investors at 13:30 GMT should keenly pay attention to the U.S. Durable Goods Orders data, which will provide analysts with some sort of perspective as to the next direction the Greenback will be heading. Traders should also eagerly await the upcoming release of the FOMC Statement tomorrow at 19:00 GMT in order to fully understand the next policy direction that Fed will take as its Quantitative Easing project comes to a conclusion.
When looking at the hourly chart for the EUR/USD, the currency pair is currently trading in a broad range but is retaining a bullish bias. Additionally it is currently taking support at the 100 day moving average of $1.26922. Furthermore, the momentum indicator is trading flat but is starting to show signs of tapering, which is implying an inherent shift towards the sell side. Lastly, the relative strength index is presently positioned in the no trade zone at the moment.
Short the EUR/USD if it moves below $1.26839 for an intermediate target at $1.26615
Long the EUR/USD if it moves above $1.27189 for an intermediate target at $1.27880