EUR/USD Forecast: within familiar range

19.05.2014 15:57:03

Quite slow Monday is seeing EUR/USD trapped in familiar levels, with the pair trading within Friday’s range, limited to the upside by 1.3730/45 price zone. From the fundamental side the calendar has been empty in Europe, exception made by some Weidmann talking: the ECB member and president of German Bundesbank added nothing new to the table, refreshing the long period of low inflation and dangerous high rate of the currency comments.

Local share markets stand in red, Nikkei extends its slide after the close and US futures are down pointing for a negative open, all of which keeps the risk to the downside in the pair, albeit technical readings in the 4 hours chart remain neutral. Some directional acceleration is required to confirm a move in the pair, with a break below 1.3690 pointing for a retest of the critical support area of 1.3640/60, and an advance above 1.3745 triggering stops and producing a run towards 1.3780 at least. Gains above this last should lead to a continuation up to 1.3820, quite unlikely for today.