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EUR/USD - Range play to continue?

  • EUR/USD keeps recent trading range of 1.16-1.17
  • Focus on German factory orders and Eurozone Sentix Investor Confidence

EUR/USD spent last entire week hovering in the narrow range of 1.16-1.17. The common currency defended the lower end of the trading range in Asia and was last seen hovering around 1.1615 levels.

Analysts at Nomura, in their weekly outlook, preview German factory orders release as follows - "we expect German factory orders to increase 0.4% m-o-m in September, following a 3.6% m-o-m rise in August. We expect German manufacturing activity to remain strong in the period ahead supported by a solid global economy. 

Meanwhile, November Sentix investor confidence that is expected to remain positive at 31.0 from 29.7 in Oct. Upbeat German and Eurozone data may help EUR revisit 1.17 handle, although an upside break would require a bigger catalyst. However, the US data docket is thin. Hence, the odds are high that the pair would retain the 100-pip trading range.

The pair could cut through offers placed around 1.17 handle if the 10Y US-German yield spread narrows sharply in the USD-negative manner. On the other hand, a break below 1.16 could happen if the Geran/EU data disappoint market expectations.

EUR/USD Technical Levels

Valeria Bednarik, chief analyst at FXStreet writes, "In the shorter term an according to the 4 hours chart, the technical stance is neutral-to-bearish, as the price settled below all of its moving averages, with the larger ones far above the current price and with strong slopes downward, but indicators lacking directional strength, anyway below their mid-lines. An extension downward below the mentioned low should favor a decline towards the 1.1460 region a major resistance level all through 2015 and 2016."

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