EUR/USD drops below 1.1960 still marginally higher for the week

EUR/USD broke to the downside after trading in a range between 1.1960 and 1.1980 for hours. The pair dropped to 1.1951, the lowest since the Asian session. Short-term momentum favors the downside but price action remains limited. 

The euro is up just 10 pips for the week versus the US dollar. It peaked on Wednesday above 1.2020 but after the FOMC meeting turned sharply to the downside and bottomed at 1.1860, a relevant short-term support.  It was able to hold on top and recovered most of the post-FOMC losses during Thursday and Friday.  

Technical outlook

The technical picture is still long-term bullish according to Valeria Bednarik, Chief Analyst at FXStreet, although she warns that EUR/USD has been confined to a well-limited range between 1.18 and 1.21 for a month already, settling mid way around 1.1970. 

“The daily chart shows that the 20 DMA has turned horizontal, in line with the ongoing consolidation, with the price moving back and forth around it. In the same chart, however, the 100 and 200 DMAs maintain their strong upward slopes hundreds of pips below the current level”, she added.

Longer time frames, also indicate that the risk is towards the upside, with the price holding above all of its moving averages in the weekly chart, and with technical indicators there lacking directional strength, but holding within overbought territory, concluded Bednarik.