EUR/USD All Set For Ride Towards 1.1600?

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!

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