EUR/USD Daily Forecast – Euro Bounces From Support Area

Further Decline in Volatility Appears Likely

EUR/USD ranges in the past two weeks have been much more narrow than usual, and with the Thanksgiving holiday in the week ahead, this trend may continue.

Last week, EUR/USD prices fluctuated about 83 pips from high to low. The week before, it was a mere 68 pips. To put things into perspective, the last three times the pair moved less than 70 pips within its weekly range was once earlier this year, once in 2014 and before that in 2004.

When it happened earlier this year, in June, it ended up marking an important high. The pair could very well be on the verge of starting a major trend from here. But for now, the pair trades in tight ranges and with the holiday this week it seems likely the pair will once again be confined to a narrow range.

Technical Analysis

A major hurdle for the pair last week fell around 1.1072 where a horizontal level is present. Further, the 20 and 100-day moving averages fell near the level to create a confluence.

It doesn’t seem to make much sense to take a bullish stance unless the pair gets above this major resistance area.

In the early day, EUR/USD is seen catching a bid from support that derives from a rising trendline that originates from this year’s low. As well, there is a horizontal level at 1.1016 to create a bit of a confluence.

I suspect this area might contain the downside in the session ahead. If it doesn’t, I’d look to support at the psychological 1.1000 handle.

To the upside, I see resistance for the session ahead at 1.1053. This is a level that contained the downside in a range that played out for most of last week.

Bottom Line

• EUR/USD volatility has slowed considerably and this might continue with the Thanksgiving holiday in the week ahead.
• There is a confluence of support at 1.1016 which can trigger a bit of a bounce in the pair after a sharp fall on Friday.