The Euro Has Been Trading Sideways for About a Year

Figure: EURUSD, Time frame: Daily, Tools: SMA200, SOURCE: Tradingview

 The attached chart shows that the EUR/USD pair has been moving within a stable, sideways range for nearly a year, with the 1.1400 level acting as support for this range-bound movement, while the levels near 1.2000 represent a major resistance zone.

On the other hand, the euro is currently trading below its 200-day moving average, which is considered a negative signal, as this average represents a key level for market movement, as illustrated in the chart.

Given that the euro carries the largest weight in the basket of currencies used to measure the strength of the US dollar, the continued rise of the dollar is putting selling pressure on the euro, especially amid expectations that rule out a US interest rate cut this year, with the possibility that the Federal Reserve may move toward raising interest rates during the first quarter of next year.

Accordingly, we will monitor the euro’s movement in the coming period to determine whether it will head toward the support area at 1.1400, or whether it will be able to regain resistance levels at 1.1670, then 1.1800, and eventually 1.2000.