The Euro moved a lot during this past week against the US dollar, as the ECB interest rate decision was on the tap. The EURUSD fell towards the 1.3500 support area after the central bank decided to reduce the interest rates. However, the pair climbed back above the 1.3600 later to trade higher, but remained below an important resistance zone. So, I think selling rallies might be a good option in the short term.
The EURUSD pair has a monster resistance around the 1.3730-70 levels. If the pair manages to climb from the current levels towards the mentioned resistance zone and creates a bearish divergence, then we can jump into a sell trade. Remember, the pair has to trade below the mentioned resistance zone in order for this trade to be valid.
Initial target should be around the 1.3510 level, and final target could be around the 1.3440 level. Stop should be placed above the 1.3800 level.
Major events scheduled in the upcoming week
This past week was an interesting one, as the Euro and the US dollar moved a lot. The highlight of the week was the ECB meeting at which the central bank decided to reduce the key interest rates by 0.10%. It now stands at 0.15%. The market expectation was of 0.15% reduction. The Euro fell in an early reaction, but later recovered all the lost ground to trade higher. The US NFP data was also published on the last Friday, which mostly came in line with the expectations. All the major pairs remain unchanged broadly before going into the weekend. There are few risk events lined up during the upcoming week, which could trigger a lot of volatility in the market.
Let us look at all major events lined up in the upcoming week.
Sunday – Japan’s trade balance data.
Monday – Canadian housing starts data and Chinese CPI data.
Tuesday – Swiss unemployment data, UK manufacturing production figures and Australia’s Westpac consumer sentiment.
Wednesday –UK employment data, US federal budget balance, RBNZ interest rate decision and Australia’s employment data.
Thursday – French CPI, Euro zone industrial production data, US retail sales, US initial jobless claims, US business inventories and New Zealand business PMI.
Friday –Japan industrial production, Chinese industrial production, German CPI, Spanish CPI, US PPI data and Michigan consumer sentiment.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPUSD, EURGBP, USDJPY, USDCAD, NZDUSD, AUDUSD, AUDNZD, GOLD and INDICES.
Get it HERE: Vladimir’s Markets Forecast
Happy trading friends!
