EUR/USD ends week in negative after breaking 1.1200 barrier

EUR/USD is about to end the week with a decline of 75 pips after a rally of the US dollar in the currency market on Friday pushed the pair to break the key short-term support area around 1.1200.

The euro weakened sharply under 1.1200 and near the end of Friday’s session is trading at the lows around 1.1150, still under pressure.

Between ranges

Today’s price action ended a 5-day trade in ranges around 1.1240. During that period EUR/USD failed to consolidate above 1.1250 while it kept finding support on top of 1.1200 until Friday when after CPI data from the US broke to the downside. Next week price action is likely to be determined by the statement and the decision of the Federal Reserve on monetary policy.

Analysts from Danske Bank expect the Fed to keep rates unchanged next week and also for the rest of 2016. “Our view on EUR/USD continues to be one of range trading over the coming months between 1.10 and 1.14 before we see a move higher driven by current account flows strongly in favour of the EUR”, said Danske analysts.