This neat EUR/USD tech setup seems too good to pass up!
Will the trend still hold up even with a light trading session?
Before moving on, ICYMI, yesterday’s watchlist checked out AUD/USD’s trend channel ahead of the U.S. ISM services PMI release. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. Nov ISM services PMI rose from 54.4 to 56.5 vs. 53.5 forecastJapanese Oct household spending down from 2.3% to 1.2% y/y vs. 0.9% forecast
U.K. BRC retail sales monitor rose from 1.2% to 4.1% y/y in Nov
RBA hiked interest rates by 25bp from 2.85% to 3.10% as expected
Australian Q3 current account balance showed 2.3B AUD deficit vs. projected 5.9B AUD surplus
German Oct factory orders rebounded by 0.8% m/m vs. projected 0.2% uptick
Upcoming Potential Catalysts on the Forex Economic Calendar:
New Zealand GDT dairy auction coming up
Australian quarterly GDP at 12:30 am GMT (Dec. 7)
Chinese trade balance up for release
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: EUR/USD
The dollar is off to a strong start this week, but will the rally last?
EUR/USD is approaching an area of interest visible on its hourly time frame, and technical indicators are hinting that support might hold.The 100 SMA is above the 200 SMA to signal that the path of least resistance is to the upside while Stochastic looks ready to pull higher from the oversold region.
If bullish pressure picks up, EUR/USD could soon revisit the swing high near the 1.0600 major psychological mark or head further north.
The pair is currently hanging around the 38.2% Fibonacci retracement level that’s right smack in line with the 100 SMA. A larger correction could reach the 50% Fib at the 1.0450 minor psychological mark or the 61.8% level closer to the trend line.
The coast is clear in terms of top-tier economic releases in the next trading session, so EUR/USD price action could hinge mostly on market sentiment.
So far, it looks like the shared currency could draw some support from upbeat German factory orders data while the safe-haven dollar might give up some ground if risk-on flows persist.
After all, reports that China is slowly loosening its COVID restrictions could keep investors hopeful that the economy could reopen soon.
In any case, make sure you check out the average EUR/USD volatility when setting entries and exits!