- EUR/USD consolidates modest recovery from weekly lows, limited by 1.1660.
- Price moved all week in a 130-pips range and continues to move sideways on a low volume environment.
The EUR/USD pair rebounded on Friday after US economic data but is still headed toward a negative weekly performance. After the ECB and US GDP data, it remains in a range, moving sideways, although closer to the lower bound.
On Friday, the US dollar corrected to the downside, after rising on Thursday and pushed EUR/USD to the upside. Before the recovery, the pair bottomed at 1.1619, the lowest since July 19. The pair found resistance at 1.1660 and it is about to end the week, moving between that level and 1.1645, down 60 pips from the level it had a week ago.
Key Levels to watch
Despite the ECB decision and US data, EUR/USD continues to move within a small range. The para managed to avoid a daily close under 1.1630 that would point to more losses.
To the upside, immediate resistance is seen at 1.1680/90, the 20-day moving average. Above that level, around 1.1740, a horizontal level, is also a downtrend line: a break higher would open the doors for a test of July highs (1.1790) and even 1.1850.
Next week
The economic calendar next week shows a serious of relevant events that could favor an increase in volatility, particularly after the limited price action moves seen during the last five days. The key events include the FOMC meeting and the US employment report.
No change is seen at the next week Fed’s meeting. “The FOMC significantly consolidated and updated its statement language in June, which likely means no material changes for August. The opening paragraph should cite strong recent GDP and job growth, with inflation returning to target. This near-term optimism is already fully priced into market expectations for a September rate hike”, wrote analysts at TDS.
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