The Euro was seen trading lower not only against the US dollar, but also against the Swiss franc. However, the EURCHF pair is likely forming a double bottom pattern on the 4 hour chart, which could act as a catalyst for a move higher in the pair. So, I think we should be looking for buy opportunities in the short term.
There is an important triangle forming on the 4 hour chart. There is also a resistance around the 1.2140 level. If the pair moves higher from the current or a bit lower levels, break the mentioned triangle resistance area and settle above it, then we can enter into a buy trade. Remember, wait for a double break before jumping into a trade.
Initial target should be around the 1.2170 level, and final target could be around the last high. Stop should be below the previous low.
Reviewing yesterday’s events and trades
Yesterday, there was no major high risk event lined up during the US session, so the market remained mostly quiet. However, the UK British Retail Consortium (BRC) Retail Sales Monitor data was published, which missed the expectation of a 0.6% rise, and registered a reading of -0.3%. This is weighing on the British pound, as the GBPUSD pair is again trading lower as expected. Other pairs such as the EURUSD and NZDUSD are also trading a touch lower.
Fundamental Outlook for the day
Today, the US federal budget balance data will be published during the NY session. If the outcome stays in line with the expectation, then the US dollar might gain further traction moving ahead, else might correct lower in the short term. Later during the next Asian session, the Japanese GDP data, and the BOJ monetary policy meeting minutes will be published. These events might cause a lot of moves on the Japanese yen, so we need to be very careful trading yen pairs moving ahead.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: USDJPY, USDCAD, GBPCHF, AUDCAD, AUDUSD, NZDUSD, GBPUSD and EURGBP.
Get it HERE: Vladimir’s Markets Forecast
Have a nice weekend friends. Happy trading!
