Market News & Analysis

Top Story

EUR/USD’s Consolidation Around 1.0900 May Reach a Breaking Point Soon

As last week’s NFP report displayed, the “on the ground” state of the US (and global) economy remains volatile, but at least when it comes to the world’s most widely-traded currency pair, the market has been taking the economic volatility in stride.

As the chart below shows, EUR/USD has been consolidating in an ever-tightening range since mid-March, with the price action over the last five weeks generally constrained to the 200-pip range between 1.0780 and 1.0980:

Source: TradingView, GAIN Capital

As EUR/USD has approached the bottom of this range, it’s consistently formed bullish candlestick reversal patterns like Morning Star or Piercing Candle formations, whereas moves to the top of the range have seen bearish candlestick reversals from Dark Cloud Cover and Evening Star patterns; this price action shows that buyers are vigorously defending the support zone around 1.0780 and sellers are aggressively offering the pair in the 1.0980 area.

Obviously, this rangebound state of affairs cannot continue indefinitely, and the broader symmetrical triangle pattern suggests that we’re likely to see a breakout in the next week or two. Given the prolonged period of subdued trading, we’re likely to see a sharp move when EUR/USD breaks out.

Rather than becoming too attached to a single directional bias in highly-uncertain times, it may be wiser for traders to have a plan for a breakout in either direction. For example, a bullish breakout could set the stage for a quick continuation up 1.1150, the late March high. Conversely, a bearish breakdown could see EUR/USD sellers target the mid-March low at 1.0630, if not lower, in the coming days.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.