The Euro bulls are trying hard to take the EUR/USD pair higher, which means there is a high chance of more gains
in the short term. The recent FOMC meeting minutes did no good for the US Dollar and there was hardly any
change in the market sentiment after the release.
Today, in the Euro Zone, there were a couple of low-risk events like France Trade Balance, Spanish Industrial
Output and France current account report. The results were not encouraging, but the market was more focused on
the ECB Monetary Policy Meeting Accounts, which is a major risk event for today in the Euro Zone. It provides an
overview of financial market, economic and monetary developments so investors always keep a close watch on the
meeting accounts.
Moreover, Peter Praet, a member of the European Central Bank's Executive Board in a speech today, stated “the
persistence of negative rates over time — two, three years — is something that becomes quite worrisome if you
think about the implications for business models”. It clearly shows that it is highly unlikely that the ECB would keep
the interest rates negative for a long time.
If we look at the hourly chart of EUR/USD, there is a range formed, and the pair recently attempted to close above
the range but failed. So, there is a chance of it moving towards the range support area where we can look to enter
a buy.
Technical Analysis
Buy Entry:
H1 – As mentioned, there is a range pattern formed on the hourly chart. So, once the pair moves down in two
waves, makes a stop near the range support area and forms a bullish divergence, we can enter a buy trade.
Target 1: 1.1440
Target 2: 1.1550
Stop Loss: 10 pips below the last low created before entering a trade.
Fundamentals events and Economic news to watch out
As mentioned, there were a couple of low risk events lined up in the Euro zone. First, France trade Balance, which
is a balance between exports and imports of total goods and services was released by MINEFA. The outcome
missed the mark, as there was a trade deficit of €-5.18B in February 2016, which increased from the last deficit of
€-3.91B (revised).
Second, the Spanish Industrial Output, which shows the volume of production of Spanish industries was reported
by the National Institute of Statistics. The forecast was slated for a rise of 3.2% in production in Feb 2016,
compared with Feb 2015. However, the Spanish Industrial Output rose only 2.2%.
In short, the reports were not impressive, which means there is a chance of the EUR/USD pair moving down in the
short term. However, as long as the pair is above the range support area, we can look to enter a buy trade.
Later today, the US Initial Jobless Claims data will be released by the US Department of Labor, which could impact the US
Dollar moving ahead. So, we can keep an eye on our plan and trade accordingly as per the market moves.
Good Luck with trading traders!
