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EURUSD still locked in side trend

Major currencies posted weekly gains, except for the yen. The leaderboard was topped by the Australian dollar ( 1.41%), while smaller gains were seen in the New Zealand dollar ( 1.27%), the British pound ( 1.16%), the Swiss franc ( 0.75%), the euro ( 0.68%), and the Canadian dollar ( 0.60%). The Japanese yen fell 0.55%.

The single currency traded lower on Friday, December 24, with EURUSD slipping  0.07% to 1.1319. Trading activity was subdued in the run-up to Christmas holidays in the US and Europe.

During the first half of the day, buyers attempted to extend the rally on the back of optimistic sentiment following reports that the Omicron strain is less dangerous than previous strains of the coronavirus. A number of recent studies have shown that the risk of hospitalization for people infected with Omicron is significantly lower compared to the Delta variant. In the upshot, EURUSD fell from the previous high of 1.1344 to 1.1304.

Today’s macro agenda (GMT 3)

Blank calendar

Current outlook

Major currencies have been showing mixed performance on Monday. Markets are closed in New Zealand, Australia, Canada and the UK. At the same time, FX players are brushing aside the rising number of new Omicron infections in the UK ( 122k), France ( 104k), Australia ( 9.9k) and other countries. Furthermore, no uptick in the number of deaths from this variant has been recorded. If there is no surge in deaths within two weeks, the market will stop paying attention to coronavirus news in the future.

Technical analysis

Price action has been trending sidewways with a range of 1.2225-1.1360 for the past month. By the time of writing, the single currency was trading at 1.1317. Trading is taking place at the upper end of the range. A narrowing pattern has shaped up within a band of 1.1305-1.1345.

This is a festive week, so trading volumes on the FX market will be thin. Today’s economic calendar is blank and sharp swings in either direction can be expected.

Bottom line: EURUSD closed to the downside on Friday. Many market participants were offline to celebrate the Christmas and New Year holidays. Volumes are expected to recover after January 3.

EURUSD still locked in side trend