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A handful of mid-tier reports are due from the top euro zone economies in the upcoming session, so I’m waiting for some momentum on this pair.

Currency Snapshot:

Major Forex Pairs Performance from MarketMilk
Major Forex Pairs Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • German import prices and U.K. current account balance at 7:00 am GMT
  • Swiss retail sales at 7:30 am GMT
  • French consumer spending and preliminary CPI at 7:45 am GMT
  • German unemployment change at 8:55 am GMT
  • Euro zone flash CPI readings at 10:00 am GMT

What to Watch: EUR/USD

EUR/USD 1-hour Forex Chart
EUR/USD 1-hour Forex Chart

Preliminary economic reports from the likes of Germany and France are coming up in the London trading session, and these figures are likely to reflect some of the impact of the COVID-19 outbreak.

In particular, spending and inflation reports are likely to show hits on account of weaker crude oil prices in the past months and quarantine protocols to keep the contagion in check.

It’s also the end of the month and quarter, so I’m counting on profit-taking off the shared currency’s recent rallies as well.

If so, EUR/USD could tumble below the near-term support around 1.0965 and carry on with its longer-term slide. The pair did hit resistance at the 50% Fib and former support at 1.1100 after all, which suggests that sellers could be regaining the upper hand.

It might be safer to wait for the actual economic figures and the euro’s reaction to the releases, though, especially since risk appetite has been present in the earlier session. Note that factory data from China turned out dubiously surprisingly better than expected, although outlook remains grim.

A pop higher to the 61.8% Fib might provide a better price to short, but make sure you account for the average daily EUR/USD volatility when setting your exit levels.