A pretty boring week so far for the major forex pairs. That doesn’t mean there aren’t legit setups though. I’m looking at EUR/USD and GBP/USD!
First up is EUR/USD, which looks like it’s about to bounce from the 1.1050 minor psychological level. What makes the area interesting is that it’s also near a 200 SMA support and a 50% Fib line. Not only that, but there’s also a slight divergence action going on!
Fundamentally I have second thoughts about selling the euro against the dollar. One look at the forex calendar shows us that China is still set to release some PMIs and Germany has yet to vote on its participation in Greece’s third bailout. Then again, there’s the FOMC meeting minutes, which could be less hawkish than market expectations if we base it on the last FOMC statement.
What do you think of this setup? Should I buy at the 1.1050 area or should I wait for the pair to reach its monthly highs or lows to increase the odds of getting more pips from a directional move?
This one is a bit more challenging. Thanks to not-so-dovish inflation numbers from the U.K., Cable just broke above the 1.5650 range resistance that I’ve bee watching. The question is, are we seeing a breakout or a fakeout? We still have reports that could affect the pair’s price action including the UK retail sales and the FOMC meeting minutes, so I might have to watch this one closely and wait for a clearer trade opportunity.
How about you? Got any setups you’re watching this week? Feel free to share!