EUR/USD Price Action Analysis Update For 12th December
(Euro/Dollar Forecast, 12th December, Forex-FX-4X.com)
- Our weekend EUR/USD technical update highlighted the 1.2875 area price pivot zone, which had confluence with a 50% retrace, as a potential support area. Price has subsequently moved as low as 1.2885 and fallen just short of this level prior to seeing an extended upside move during early week trading.
- The low of the week came after a touch of the ascending trend line as per the euro/dollar daily chart below.
- A break higher came after the inside day formed on Monday and the subsequent rally has found intra-day resistance at the key 1.3000 level/50% retracement area from the last swing lower. The EUR/USD is up 0.53% on the daily basis (11th Dec) on signs of increasing risk appetite but is now trading at a significant technical area.
- The above comes in the context of the dollar index last week printing a bullish weekly outside candle. It is important to note that the candle has yet to see a confirmation break. We remain cautious around the dollar weakness play until this bullish weekly USDX setup is invalidated.
- Price action developments around the EUR/USD 1.3000 round number could help us gain a clearer perspective and near term directional bias over the coming trading sessions. A bearish candle reversal setup would align with the weekly setup, while bullish price action would see a conflicting signal.
- A consolidation phase prior to the FOMC ( Federal Open Market Committee) press conference on the 12th December may be seen as market participants await any news, around the asset purchase program and additional easing measures, from this key event risk.
- When referencing related markets we note that the dollar index is now trading around the 80.00 handle after a 0.30% decline, at an area which has previously been supportive. EUR/JPY has seen a resumption of the mid-term trend uptrend and has appreciated around 0.70%, to 107.30, as the yen was broadly weaker. EUR/GBP has gained for two consecutive days and is trading around 0.8070 with GBP/USD threatening 1.6130 area resistance.
EUR/USD Price Action, Technical Report, Euro/Dollar Forecast – 12th December