EUR/USD is trading slightly above daily lows, entering the last hour of trade of the week. The euro lost strength on Friday and pulled back below 1.1300.
Despite falling on Friday, the pair is about to post the third weekly gain in a row and the strongest close since October. The decision of the Federal Reserve to leave rates unchanged and the lowering of rate hike expectations, weakened the US dollar across the board and boosted EUR/USD.
The pair rose from levels under 1.1050 and peaked on Thursday at 1.1342. On Friday, it made a modest bearish correction. It was about to end the week trading around 1.1250/70, 110 pips above the level it had seven days ago.
EUR/USD still below 2016 highs
Despite the strong rally the euro was unable to reach fresh year-to-date highs. Price failed to reach 1.1375 (2016 high) and also it was unable to hold above 1.1300. So far the retreat made no technical damage to the short-term bullish outlook; but for the euro to extend gains it must be able to consolidate on top of 1.1300 and also needs to break 2016 highs; above the next key area is 1.1450 – 1.1500.
Price held above the 20-week moving average that continues to offer support, currently stands at 1.0930; while the 20-day MA is seen at 1.1040/50. A consolidation under the 1.1040 area could change the short-term bias.
(Market News Provided by FXstreet)