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In the previous EUR/USD Weekly Review, we noted that from a technical perspective the short and medium term SMAs were displaying conflicting indications and hence the currency pair might continue to range. Furthermore, the SMA 200 which is a long term indicator laid just below the price action and might act to cap downside moves. Fundamentally, the Euro Zone continued to be plagued by confidence issues and equities were taking a hit. S&P’s downgrade of the US rating might complicate matters.
Looking at the EUR/USD chart above, as mentioned in the previous EUR/USD weekly review, the currency pair continued to range without any sustained momentum. Typical of conflicting SMA indicators. The SMA 200 also continued to function as a region of support for the currency pair.
SMA 20 = flat
SMA 50 = flat
With both SMAs flat, it is still premature to consider any possibility of a long term sustained momentum. A closer look at the EUR/USD chart suggests that the currency pair range may be narrowing between the two sloping trendlines. If indeed so, we may be seeing a squeeze induced breakout soon if the trendlines continue to provide the respective support and resistance. It is important to note that the SMA 200 continues to lie just under the current price action region.
Continue on to TheGeekKnows.com for the fundamental analysis of the EUR/USD Weekly Review to understand more about the underlying market sentiments.
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