Buying Euro Favored as a Correction is due (extract from Weekly Market Forecast 16th of November 2014)

The Euro somehow performed better during this past week and climbed a bit higher against the US dollar. It managed to break an important resistance area, which suggest that the EURUSD pair might continue trading higher. There is also a bullish divergence forming on the weekly chart as well. So, I think buying dips is a good option in the short term.

There was a critical bearish trend line on the 4 hour chart of the EURUSD pair, which was breached recently. It also broke an important resistance area, which might act as a support in the short term. So, if the pair moves lower from the current levels towards the mentioned support area and makes a stop, then we can enter into a buy trade.

Initial target should be around the 1.2550 level, and final target could be around the 1.2600 level. Stop should be placed below the 1.2440 level.

Major events scheduled in the upcoming week
The British pound was the highlight of this past week, as it dived against the US dollar. The GBPUSD pair broke the 1.5620 support area and traded a touch lower below it. There is immense pressure on the British pound bulls, which means there is a chance of more downside in the short term. On the other hand, the Euro somehow climbed a bit higher. The US dollar overall remained stable during this past week. We need to see how it trades in the upcoming week, as the possibility of a correction is increasing day by day moving ahead.

Let us look at all major events lined up in the upcoming week.
Sunday – New Zealand Retail Sales and Japanese GDP.

Monday – NY empire state manufacturing index and US industrial production.

Tuesday – UK CPI, UK PPI, German ZEW economic sentiment and US PPI.

Wednesday –BOE Vote change, US building permits, US housing starts, New Zealand PPI and Chinese HSBC manufacturing PMI.

Thursday – German PPI, French manufacturing PMI, German manufacturing PMI, German services PMI, Euro zone manufacturing PMI, UK retail sales, US CPI, US initial jobless claims and existing home sales data.

Friday –Canadian CPI.

This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPCHF, EURGBP, USDJPY, EURJPY, GBPJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD, USDCAD and AUDCAD.
Get it HERE: Vladimir’s Markets Forecast

Happy trading friends!