How to Read EUR/USD: Support, Resistance and the 1.1100–1.1220 Range Explained for Beginners
EUR/USD is the most traded currency pair in the world, accounting for an estimated 30 percent of all foreign-exchange transactions. The quote is a ratio: at 1.1175, one euro buys 1.1175 US dollars. When the pair rises, the euro is strengthening against the dollar; when it falls, the dollar is strengthening against the euro. Every move is therefore two stories at once, and the pair moves on the difference between the two, not on either one alone.
Into the first week of November, EUR/USD was consolidating within 1.1100 to 1.1220, according to a Monday morning briefing, with the Dollar Index likely to trade within 101.50 to 102.30. The pair had finished Friday at $1.1160, down 0.20 percent, and gathered strength to near 1.1175 in early European trading on Monday. An earlier technical update described the path into the range: the euro failed to settle above 1.1265, trimmed gains, traded below the 1.1220 support zone, settled below its 100 and 200 simple moving averages on the 4-hour chart, and revisited the 1.1110 zone, forming a low at 1.1104 before starting a minor recovery wave. A bearish trend line is forming with resistance at 1.1225 on the 4-hour chart. Between those lines, price can chop sideways for days.
On the daily chart, EUR/USD retains a bearish near-term bias while it holds beneath the 100-day simple moving average. The topside references stack up cleanly: initial resistance at the Bollinger middle band at 1.1195, ahead of the upper Bollinger band near 1.1260, with a more substantial cap at the 100-day simple moving average at 1.1425. Moving averages smooth price over a chosen window; Bollinger Bands wrap a moving average in a volatility envelope that expands when volatility rises and contracts when it falls.
The Federal Reserve held its target range at 3.75 to 4.00 percent on October 28, and the European Central Bank held its deposit facility rate at 2.50 percent on October 29. Data on Friday showed the eurozone economy grew more than expected in the third quarter: GDP expanded 0.4 percent quarter on quarter, versus 0.6 percent in the second quarter and stronger than the 0.2 percent expected, while Germany grew 0.2 percent versus 0.3 percent in the prior quarter. Credit ratings agency Fitch revised France's outlook to negative from stable on Friday, and Commerzbank's Thu Lan Nguyen noted EUR/USD has settled around 1.12 after dropping from 1.16 at the end of September, warning that calm in foreign-exchange markets is not justified given rising geopolitical and fiscal risks.
The week's calendar: Germany retail sales and the US ISM Manufacturing PMI (forecast 54.7 versus 54.5 previous) on Monday, eurozone manufacturing PMI (forecast 52.4), and the October US jobs report on Friday, November 6.
Risk rules: a pip is 0.0001 for EUR/USD, so 1.1175 to 1.1225 is 50 pips; risk a small fixed fraction of an account per trade; place stops where your reading is proven wrong; respect sessions (London/New York overlap most active); remember leverage magnifies losses too; keep a journal.
FAQ
What does EUR/USD at 1.1175 mean? One euro buys 1.1175 US dollars.
What is the current range? Consolidation within 1.1100 to 1.1220, with a low at 1.1104 and bearish trend-line resistance at 1.1225 on the 4-hour chart.
What resistance sits above? The Bollinger middle band at 1.1195, the upper band near 1.1260, and the 100-day simple moving average at 1.1425.
Why did the euro strengthen on Monday? Eurozone third-quarter GDP grew 0.4 percent, beating the 0.2 percent expected, ahead of US ISM manufacturing data and Friday's jobs report.
What is a pip? The smallest standard move, 0.0001 for EUR/USD.
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Related reading on the site: the EUR/USD sessions guide in Forex Trading.
This article is market news and general information only, not financial advice.
