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I’m seeing a fresh leg lower for EUR/USD, but can it still pull up for a retest?

Here are the short-term correction levels I’m watching.

Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Chinese retail sales sank 11.1% in April vs. projected 6.2% drop

China’s fixed asset investment up 6.8% vs. expected 7.2% gain

Chinese industrial production fell by 2.95 vs. estimated 0.5% uptick

Japanese preliminary machine tool orders slowed from 30% to 25.5%

German wholesale prices up 2.1% vs. projected 4.2% increase

Upcoming Potential Catalysts on the Forex Economic Calendar:

EU economic forecasts at 9:00 am GMT
Canadian manufacturing sales at 12:30 pm GMT
U.S. Empire State manufacturing index at 12:30 pm GMT
FOMC member Williams’ speech at 12:55 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: EUR/USD

EUR/USD 1-hour Forex Chart

EUR/USD 1-hour Forex Chart

After nearly a month of consolidation, this pair fell through the bottom of its range at the 1.0500 major psychological mark to signal that sellers have the upper hand.

Support at the 1.0350 minor psychological level is holding so far, though, presenting a quick pullback opportunity.

Using the Fib tool shows that the 61.8% level coincides with the former support at 1.0500, which might now hold as resistance. A shallow pullback might even find sellers at the 38.2% Fib near the 1.0450 mark already.

Stochastic is heading lower to show that sellers are in control of the game, and the oscillator has plenty of room to move south before reflecting exhaustion.

Also, the 100 SMA is below the 200 SMA to confirm that resistance levels are more likely to hold than to break. The 200 SMA dynamic inflection point even lines up with the area of interest to add to its strength as a ceiling.

Risk-off flows might be enough to keep the safe-haven dollar supported today, as disappointing data from China kept recession fears in play.