Today's session is relatively quiet due to public holidays (Memorial Day).
EUR/USD pair has been trading in a consolidation zone for more than 14 days.
Despite the lack of volatility, the pair reacted near the lower boundary of the consolidation zone.
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However, due to the lack of market volatility, there is a risk that buyers will not be able to overtake above the consolidation zone and continue to prolong lateral movement.
This week will also be especially important, as the NFP report will be released on Friday and the US dollar is expected to be exposed to periods of high volatility.
In the chart below, we can see the price reaction near the lower limit of the consolidation zone.
If a break occurs above the consolidation zone, the bullish momentum may continue. On the other hand, if sellers manage to regain control of the price near the upper limit of that area, then the pair may become under pressure once again.
Eur/usd, 1 hour time frame chart. Source: xStation 5
The US dollar index (DXY) reached January lows this year and reflects very well the current situation in the EUR/USD, since the DXY index also remains sideways.
USDIDX, 4 hours time frame chart. Source: xStation 5
NZD is the best performing major currencies while CAD lag the most
Source: currency-strength.com
Henrique Tomé, XTB Portugal
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