EUR/USD Pair Faces Consolidation After Reaching Intraday High

EUR/USD Pair Faces Consolidation After Reaching Intraday High

The EUR/USD currency pair has been one of the most volatile lately. This nominal exchange rate shows how many Euros it takes to buy one United States Dollar. After hitting an intraday high when the news of his appointment was 1.1424, the pair has since pulled back to trade around the 1.1360 level. As such, this movement would suggest some type of constructive consolidation period before the pair makes another attempt at a directional breakout higher.

Currently, the EUR/USD pair is still trading well-below all its moving averages trend indicators, which confirms the bullish outlook. Support is at the 20 Simple Moving Average (SMA), just above the recent low, near 1.0930. This positioning continues to support the argument that the risk is indeed skewed to the upside. It’s inevitable, say market analysts, that a round of consolidation is on the way. Nonetheless, they’re confident that the duo will work to earn some much better high highs in the near future.

Right at the beginning of the week, the EUR/USD pair broke strong above the key 1.1400 area. The rally quickly ran out of steam and fell instead into a wide consolidative range. With price action in this range, it remains well under the important 1.1400 cap. This implies that participants are still living through a period of market uncertainty. Notwithstanding the recent pull back, the pair is holding onto its gains. A pause in the strength of the US Dollar is providing a boost to its fortunes.

The backstory to this trading pattern is the rare, ever-changing US tariffs, which to this day still influence market trade. Trade is surely breathing a sigh of relief over these tariff changes. This change in risk appetite is presently fueling extreme volatility in the currency markets.

In light of this uncertainty, traders are ever vigilant to shifts in tariff policy and important economic indicators. The EUR/USD pair’s dive across Friday’s range shows that the market remains risk-averse. Additional relief related to the tariffs has strengthened the Euro. Because of this, it’s been able to keep its head above water against the USD.

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