EURUSD Range Support (July 18, 2016)

Price is currently testing support at the bottom of the range and seems ready for a bounce back to the top. 

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. However, price might still encounter a bit of resistance at the middle of the range around 1.1100, which is around the dynamic inflection points of the moving averages.

Stochastic is on the move up, indicating that buyers are regaining control of price action. But if sellers refuse to give way, a break below the range support could send price lower by around 120 pips, which is approximately the same height as the range.

Data from the US economy came in stronger than expected on Friday. Headline retail sales rose 0.6% versus the projected 0.1% uptick while core retail sales advanced 0.7% versus the estimated 0.4% gain. Headline and core CPI came in line with expectations of 0.2% gains.

As for the euro, tensions in the European region following the attack in Nice and the coup in Turkey could keep weighing on the shared currency. Traders might also be pricing in expectations of additional easing from the ECB in their monetary policy statement later this week. 

There are no major reports out of the US and the euro zone today so volatility might be low. Tomorrow has the German ZEW economic sentiment up for release and analysts are expecting to see a drop from 19.2 to 8.2. The US has building permits and housing starts data lined up.

By Kate Curtis from Trader's Way