FXStreet (Guatemala) – Valeria Bednarik, chief analyst at FXStreet explained the events overnight in relation to EUR/USD.
Key Quotes:
“The American dollar traded generally lower across the board, although market lacked volume this Monday, and majors remained confined to tight intraday ranges.”
“The EUR/USD pair advanced up to 1.0844 in the American afternoon, meeting selling interest around the 38.2% retracement on the December rally.”
“The recovery of the common currency was supported by a pullback in oil’s prices as the commodity was unable to hold into early gains, on renewed fears of a worldwide glut, after Iraq reported a production of as much as 4.13 million barrels a day during December. Early in the European session, Germany released its January IFO survey, showing that confidence remains sluggish in the country, as business confidence dropped to 107.3 from a revised 108.6 in December. In the US, the Dallas FED Manufacturing business index fell by 34.6, in January, following a 20.1 drop in December.”
“The pair closed in the green, once again holding in the base of its latest range, the 1.0780/1.0800 region, and the 50% retracement of the above-mentioned rally.”
“In the 4 hours chart, the price was capped by a bearish 20 SMA, around 1.0840, while the technical indicators diverge from each other within bearish territory, giving no clear clues on what’s next for the pair. Some follow through above 1.0845, however, should favor a continuation rally up to the 1.0910/25 region.”
(Market News Provided by FXstreet)