EURUSD In Range As Market Settles After Dollar-Dominated Week
The EURUSD pair continues to be range-bound as traders opt to wait for more high-impact fundamentals next week. The euro inched up +0.03% in pre-market trading to exchange at a rate of 1.0781 against the dollar at 7.45 AM GMT. This week has seen the dollar consolidate following substantial gains driven by strong US economic data and hawkish Fed interest rate rhetoric.
The Eurozone currency has shown its resilience in keeping at bay the dollar on the back of Thursday’s release of better-than-expected US jobless claims data. However, the US Treasury yields have stayed strong this week, with yields on 10-year bonds at 4.17%. Therefore, heading to the weekend, push-pull between the euro’s resilience and the dollar’s consolidation will likely keep EUR/USD within a constricted margin on either side.
Significantly, no high-impact data will be coming out of the United States and the Eurozone on Friday. Consequently, investors will likely adopt a wait-and-see approach, which will likely keep in range until Tuesday’s release of US Consumer Price Index (CPI) data.
The market will also be keeping its eyes on the geopolitical scene in the Middle East as it becomes increasingly likely that Israel could launch a ground offensive Gaza’s Rafah city. Such a move will provide fodder for the safe haven dollar, as further escalation could trigger greater political uncertainty, driving up demand for the dollar.
The momentum indicators seem to signal a continuation of range movement for the EURUSD pair, with the pivot at 1.0755. Upward action will likely meet the first resistance at 1.0790, possibly testing the second resistance at 1.0805. However, investors should look for further downward action if the pair breaks below 1.0755, with support at 1.0740. However, a breach below this level will invalidate the bullish view, with the price possibly going.