The EURUSD pair traded higher during the last week, and was able to break the critical resistance level at around the 1.3650/60 level. The pair also breached an important channel resistance, as can be seen in the daily chart shown below. Now, I think this break is critical, and the pair might continue to trade higher from the current levels. So, I think we should look for short term buy opportunities.
There is an up-move trend line, as plotted on the 4 hour chart shown below. There is also a critical support level at around the 1.3630/40 level. If the pair retraces some of the recent gains, stops around the support zone and creates a bullish divergence, then we can jump into a buy trade. I think every valley is a buy opportunity for the pair in the short term.
Initial target should be around the 1.3740 level, and final target could be around the 1.3810 level. Stop should be triggered on a 4 hour close below the up-move trend line.
Major events scheduled in the upcoming week
The US dollar was again seen on the back foot in the last week. The data which was released for the US was again on the disappointing side, as some key figures such as retail sales came as a disappointment. The US dollar traded a touch lower in the last week, and as a result some major pairs traded higher. The highlight of the last week was the GBPUSD, as the pair traded above the key resistance level, and closed around multiyear high levels. The BOE outlook towards the economy was positive, which resulted in a rally for the pair. The EURUSD also traded higher during the last week, as the data from the Euro zone was also on the positive side. The growth figures for the Euro zone were encouraging.
Let us look at all major events lined up in the upcoming week.
Sunday – Japan’s GDP data and New Zealand’s retail sales data.
Monday – Not much lined up as there is a holiday in the US – Washington’s Birthday.
Tuesday – Euro zone current account data, the UK PPI and CPI data, German ZEW economic sentiment, NY Empire state manufacturing index, TIC net long term transactions data and Australia’s wage price index.
Wednesday – UK employment data, US building permits data, housing starts figures, New Zealand’s PPI data and Chinese HSBC manufacturing PMI.
Thursday – German PPI data, French CPI, French manufacturing and services PMI, German manufacturing and services PMI, Euro zone manufacturing and services PMI, UK retail sales data, US inflation data and Philadelphia fed manufacturing index.
Friday – Canadian CPI and retail sales data and US existing home sales data.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPUSD, EURGBP, USDCAD, USDJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD and INDICES.
Get it HERE: Vladimir’s Markets Forecast
Enjoy the weekend friends!
