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EUR/USD: base camp above 50 DMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - EUR/USD is currently trading at 1.0865 at time of writing while oscillating in a tight range.

    The euro has been recovering in cautious markets as a funding currency so that when risk has been poor it is able to drift higher, as speculative positions are scaled back. This is similar to the Yen in carry trading where it is sold to fund higher yielders. For the mean time, the euro has found an equilibrium above the 50 dma at 1.0812 as we head in towards the close for the week.

    EUR/USD levels

    Technically, the 4 hours chart shows that the moving averages are now directionless and within a tight range, as explained by Valeria Bednarik, chief analyst at FXStreet.

    "While the technical indicators move back and forth around their mid-lines, it is reflecting the ongoing range and giving no clues on what's next for the pair. Selling interest has been containing rallies around 1.0925, ever since the year started, and represents the 23.6% retracement of the same advance, while buyers have appeared on approaches to 1.0800. Unless some extension beyond those limits, the pair will maintain a neutral stance and playing the range seems to be the way to deal with it."
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