Looking at the above EUR/USD daily MT 4 chart, the euro currency (EUR) managed to finish the week fairly unchanged against the U.S. dollar (USD).
Last week, currency traders reacted to market sentiment over everything else. There are mounting tensions between the United Kingdom and the European Union. These tensions are focused on the apparent deadlocked concerning the ongoing, and at times heated, free trade negotiations.
Both the EU and the UK have until 31 December to reach a free trade agreement. If no deal is reached, then the United Kingdom will crash out of the Eurozone.
Last week, the United Kingdom presented draft legislation which blatantly violates international law and the Irish Backstop agreement. In response, the Eurozone to issue a stern warning to the United Kingdom. Withdraw the legislation or face sanctions and possible court proceedings. This sent the British pound lower.
The euro currency (EUR) also took a hit as Forex traders switched sentiment to “risk-off.” The economic calendar is fairly quiet. The Eurozone is releasing monthly industrial production data and the United States is publishing monthly consumer inflation expectations. The United Kingdom will release transcripts from their inflation report hearings.
Daily Euro Currency Technical Analysis (EUR/USD)
Looking at price action, the euro did manage to form a lower low and lower high, which indicated that the benchmark EUR/USD currency exchange rate might have gas left in the tank for a move higher. However, while trading below 1.19, the bears can still enter the market driving price action lower.
Also, Forex traders should note that the short term twenty (20) day moving average has crossed above the longer term moving averages.
The MACD histogram is also moving lower from monthly highs and the relative strength index (RSI) is hovering around 67. This could indicate pressure on the U.S. currency which would push this Forex market higher.
Right now, price action is rather neutral as the EUR/USD is trading around that twenty day moving average and above the one hundred and two hundred (100,200) day moving averages.
A failure to close above 1.1910, on a daily basis could bring the weekly low price point at 1.1752 into play. The next downside barrier lines up at 1.1680. A daily close above 1.19 then 1.1910 will retest the yearly high price point at 1.2010.