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The EUR/USD pair has exhibited a slight upward bias during the initial trading sessions of the week. However, this upward momentum has been limited, with the pair struggling to consolidate above the key resistance level of 1.0860.
On the technical front, analyzing the 4-hour time frame chart reveals that the 50-day simple moving average is providing support for the daily uptrend, while the pair is maintaining stability above the psychological support level of 1.0800. Conversely, the pair is encountering resistance at the strong level of 1.0860, accompanied by negative crossover signals on the stochastic indicator.
Given the conflicting technical signals and the narrow trading range between 1.0800 and 1.0860, it is prudent to monitor the price action for potential scenarios:
- For a bullish continuation, a clear and decisive breach of the 1.0860 resistance level is needed to pave the way for further gains towards 1.0930 and 1.0960.
- Conversely, a bearish signal would materialize with a break below the 1.0800 support, targeting levels around 1.0765 and then 1.0740 as initial targets.
It’s important to exercise caution as high-impact economic data from the American economy, specifically the Services Purchasing Managers’ Index issued by the ISM, is expected today. This could lead to increased volatility at the time of the news release.
A word of caution: Today’s trading landscape is punctuated by the release of impactful economic data emanating from the American economy, notably the “Consumer Confidence Index.” Consequently, heightened volatility is anticipated upon the dissemination of this news.
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