EUR Returns to the narrow range ahead of FED interest rate decision
Key Takeaways from EUR/USD Analysis for December 13, 2023:
- Bearish Pressure and Resistance Level: EUR/USD is under bearish pressure with a critical resistance at 1.0896. A breakout above this level could signal a bullish shift.
- FOMC Decision Impact: The market awaits the FOMC interest rate decision, which is expected to significantly influence volatility and market direction.
- Mixed Trading Sentiments: The overall sentiment is bullish, but technical indicators show a mix of buy, sell, and neutral signals, suggesting a need for cautious trading.
Technical Market Outlook:
During the pull-back, the EUR/USD pair has made a new local high at the level of 1.0829. Despite this, bearish pressure remains strong. A Pin Bar candlestick formed at the top of the bounce, leading the market back into a narrow horizontal trading zone. The key technical resistance for bulls, acting as a potential gamechanger, is at 1.0896. Only a sustained breakout above this level could shift the short-term outlook to more bullish. For bears, the next targets are 1.0697 and 1.0675.
Momentum on the H4 time frame chart stays neutral as market participants await the FOMC interest rate decision, economic projections, and press conference later tonight. It is important to stay focused during these key data releases, as they can greatly impact the market and might trigger high volatility trading conditions.
Weekly Pivot Points:
Pivot Points are crucial in technical analysis. They help identify potential trend reversals, support, and resistance levels in financial markets.
- WR3 - 1.1033
- WR2 - 1.0964
- WR1 - 1.0862
- Weekly Pivot - 1.0764
- WS1 - 1.0691
- WS2 - 1.0622
- WS3 - 1.0520
Trading Outlook:
The EUR/USD pair reversed from the 61% Fibonacci retracement positioned at 1.0963 after a fake breakout. The market then reversed sharply, with the price currently -2.70% lower. For a continued upward movement, a weekly close above this level is necessary. Such a breakout would serve as an initial signal for a potential long-term trend reversal in favor of the Euro.
EUR/USD H1 Intraday Indicator Analysis:
- 7 out of 22 technical indicators show a Buy signal.
- 8 indicators are Neutral.
- 8 indicators show a Sell signal.
- 6 out of 18 moving averages indicate a Buy signal.
- 12 moving averages indicate a Sell signal.
Sentiment Scoreboard:
The general sentiment on the scoreboard is bullish (60% bulls vs. 40% bears). Last week's sentiment also remained bullish (57% bulls vs. 43% bears), and the sentiment over the last three days is similarly bullish (59% bulls vs. 41% bears).
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Important Reminder
The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.
Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.
