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PMI reports from Australia and Japan made for a lively trading during the Asian session.

But with both the euro zone and the U.S. printing closely-watched data today, I’m setting my sights on a short-term trend for EUR/USD.

What do you think?

Currency Snapshot

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

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • France’s manufacturing and services PMI at 7:15 am GMT
  • Germany’s manufacturing and services PMI at 7:30 am GMT
  • Euro Zone’s manufacturing and services PMI at 8:00 am GMT
  • U.K.’s manufacturing and services PMI at 8:30 am GMT
  • U.K.’s CBI industrial order expectations at 10:00 am GMT

What to Watch: EUR/USD

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

EUR/USD is trading on a low key descending channel on the 1-hour time frame.

If traders focus on the European officials’ plans for a stimulus program, or if today’s manufacturing and services PMI reports from the euro zone aren’t as grim as analysts are expecting, then we could see EUR/USD revisit yesterday’s highs above 1.0850.

Meanwhile, the U.S. is set to print another weekly account of the initial jobless claims. Word around is that we could see another 4.40 million new claimants.

If today’s market themes spur another round of risk aversion in the markets, then traders could flock to the dollar and drag EUR/USD below its 1-hour channel.

Buying at current levels in the hopes that EUR/USD will hit its channel resistance could get a decent reward-to-risk ratio especially if you place your stops just below the channel.

If you’re betting on further losses for the euro, however, then you can also wait for bearish momentum or weak European reports before aiming for previous lows close to the 1.0780 levels.