Selling Rallies Short-term favored in EURUSD (extract from Weekly Market Forecast 1st of June 2014)

The US dollar was seen trading higher against the Euro this past week. The EURUSD pair managed to find support around the 1.3600 levels. The pair might retrace in the short term. However, I think that selling rallies is a good option considering the recent market sentiment.

There are two major resistances on the way up for the EURUSD pair, as can be seen in the chart below. If the pair bounces from the current level close to the 1.3740, makes a stop and forms divergence, then we can jump into sell trade. Remember, we need to wait for the right time before jumping into a sell trade.

Initial target should be around the 1.3620, and final target could be around the 1.3560 level. Stop should be placed above the 1.3780 level.

Major events scheduled in the upcoming week
The US dollar traded higher this past week, as the currencies like the Euro and British pound lost the ground. However, before ending the week the US dollar lost a bit of ground, which took the pairs higher. The market sentiment still remains bearish for some time. If it is boosted further, then the dollar might gain some more ground moving ahead. There are several risk events lined up during the upcoming week, so we need to see how the market reacts to the data. If the sentiment changes, then some swing moves can be noted in the US dollar.

Let us look at all major events lined up in the upcoming week.
Sunday – Japan’s manufacturing PMI.

Monday – German manufacturing PMI, Italian manufacturing PMI, French manufacturing PMI, UK Manufacturing PMI, German CPI, US ISM manufacturing PMI and Australia’s retail sales data.

Tuesday – RBA interest rate decision, Euro zone CPI data, US factory orders and Australia’s GDP data.

Wednesday – German services PMI, Italian services PMI, French services PMI, UK services PMI, BOC interest rate decision and US ADP nonfarm employment change.

Thursday – Euro zone retail sales data, BOE interest rate decision, ECB interest rate decision and Canadian Ivey PMI.

Friday –German trade balance, UK trade balance, US NFP data and Canadian employment data.

This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPUSD, EURGBP, USDCAD, EURCAD, AUDUSD, NZDUSD, AUDNZD, EURAUD, GOLD, SILVER, OIL and INDICES.
Get it HERE: Vladimir’s Markets Forecast

Happy trading friends!