EUR/USD Forex Technical Analysis – Tight Trading Range Fueled by Below Average Holiday Volume

The Euro is trading flat against the U.S. Dollar for a fifth straight session on Thursday as traders remain reluctant to take a big position ahead of the long holiday weekend. Perhaps keeping a lid and a floor on the common currency is the lack of major economic news in both the U.S. and Europe, with most investors primarily focused on central bank activity.

At 12:07 GMT, the EUR/USD is trading 1.0615, up 0.0017 or +0.10%. On Wednesday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $97.92, down $0.01 or -0.01%.

Low holiday volume is one reason for the rangebound trade along with Euro Zone bond yields which struggled for direction as investors took stock of a surge in borrowing costs in the wake of last week’s European Central Bank (ECB) meeting.

Later today at 13:30 GMT, EUR/USD traders will get the opportunity to react to the Final Third-Quarter U.S. GDP data along with the latest weekly unemployment claims report. It is expected to show jobless claims rose from 211K to 221K.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 1.0736 will signal a resumption of the uptrend. A move through 1.0576 will change the main trend to down.

The nearest resistance is a pivot at 1.0656. The closest support is a minor pivot at 1.0590, followed by a 50% level at 1.0513.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at 1.0656 is likely to determine the direction of the EUR/USD on Thursday.

Bullish Scenario

A sustained move over 1.0656 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the main top at 1.0736, followed by the June 9 main top at 1.0774.

Bearish Scenario

A sustained move under 1.0656 will signal the presence of sellers. This could lead to a test of the next pivot at 1.0590, followed by the main bottom at 1.0576. A trade through this level will change the main trend to down.