EURUSD Holds Tight Range for 10th Straight Day

The Euro (EUR) inched lower against the US Dollar (USD) on Wednesday, dragging the price of EURUSD to less than 1.1380, holding a tight range for the 10th consecutive day. The Technical bias remains bullish because of a Higher High in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded near 1.1376. A support may be noted around 1.1345, the intraday low of yesterday ahead of 1.1335, the horizontal support area as marked in the following daily chart. A break and daily closing below the 1.1335 support area could trigger the correction wave, validating a move towards the 1.1250 zone.

On the upside, the pair is likely to face a hurdle near 1.1464, the intraday high of yesterday ahead of 1.1471, a major horizontal hurdle on higher timeframes. The technical bias will remain bullish as long as the 1.1218 support area is intact.

US Budget Statement

The U.S. government posted a US$108 billion budget deficit in March, more than double the amount from the same period last year, the Treasury Department said on Tuesday. The government had a deficit of US$53 billion in March of 2015, according to the Treasury’s monthly budget statement. Analysts polled by Reuters had expected a US$104 billion deficit for last month.

Accounting for calendar adjustments, March would have shown a US$102 billion deficit compared with an adjusted US$89 billion deficit in March 2015. The current fiscal year-to-date deficit was US$461 billion, up 5 percent from a US$439 billion deficit this time last year. Receipts last month totaled US$228 billion, while outlays stood at US$336 billion.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair appears to be a good strategy once the above mentioned range is broken.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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