The Euro made an attempt to trade higher against the US dollar this past week, but it failed miserably as the ECB President Mario Draghi hinted of more action the near term. This caused a downside in the EURUSD pair and it broke an important support around the 1.2400 area. This break can be considered as a bearish and that is the reason why I think selling rallies in EURUSD looks like a good option.
There was a bullish trend line on the 4 hour chart, which was breached during this past week. This trend line might act as a resistance in the near term. If the pair manage to correct higher from the current levels towards the broken support area, forms a bearish divergence on the lower timeframe, then we might consider entering into a sell trade.
Initial target should be around the 1.2350 level, and final target could be around the 1.2300 level. Stop should be placed above the 1.2480 level.
Major events scheduled in the upcoming week
The US dollar once again to a certain extent moved higher against the Euro and the British pound. The Euro was seen trading lower one more time and it looks like about to test the last low against the US dollar. The GBPUSD pair mostly consolidated in a range. The best performing US dollar pair was USDJPY. The pair jumped higher this week as well and almost challenged the 118.50 level. The economic releases in the US were mostly on the positive side, which lifted the US dollar in the near term.
Let us look at all major events lined up in the upcoming week.
Sunday – New Zealand Visitors arrival data.
Monday – German IFO business climate index, US services PMI and New Zealand inflations expectation data.
Tuesday – German GDP, US GDP, Canadian retail sales, CB consumer confidence and Australian construction work done data.
Wednesday –GFK German consumer climate, UK GDP, US durable goods orders data, US personal spending, Chicago PMI, New home sales, pending home sales and New Zealand trade balance data.
Thursday – Spanish GDP, German unemployment data and Japanese industrial production data.
Friday –German retail sales, Spanish retail sales, Euro zone CPI, unemployment rate and Canadian GDP.
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!
