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Light calendar ahead due to the weekend holiday, so the textbook technical patterns and recent catalysts from Europe make EUR/USD the pair to watch for the session.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12203.96 +0.42%
FTSE: 7467.19 -0.06%
S&P 500: 2897.89 -0.09%
DJIA: 26497.85 +0.18%
US 10-yr 2.554% -0.038
Bund 10-YR 0.023% -0.059
UK 10-YR: 1.202% -0.034
JPN 10-YR: -0.026% -0.017
Oil: 63.62 -0.22%
Gold: 1277.60 +0.06%
Bitcoin: 5245.29 +0.49%
Etherium: 171.57 +3.24%

Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Fed Bostic speaks in Jacksonville, FL at 5:10 pm GMT
  • Japan National CPI at 12:30 am GMT (Apr. 19)
  • U.S. building permits at 1:30 pm  GMT (Apr. 19)
  • U.S. housing starts at 1:30 pm GMT (Apr. 19)

What to Watch: EUR/USD

EUR/USD 1-Hour Forex Chart
EUR/USD 1-Hour Forex Chart

With the Easter holiday just ahead, we don’t have very many potential market moving catalysts to throw on the watchlist, leaving us with U.S. housing and Japanese CPI data as our only potential sparks for volatility heading into the weekend. So, the U.S. dollar is our best bet as housing data can be a market mover (Japanese data doesn’t usually ignite much volatility), and recent technical setups and market driving themes could continue to play out for the next session or two.

For today we’ll focus on EUR/USD, which just spiked lower on the session due to another disappointing round of PMI updates from Europe. On the one hour chart above, we can see that this behavior broke a pattern of rising ‘highs’, as well as taking the market below a strong area of interest around 1.1280 (broken resistance turned support, now broken again). Without any scheduled events to potential shift euro sentiment, it’s likely euro bears will stay control until next week. And if U.S. housing comes out better-than-expected, then this technical breakdown may not be a fake out and have some legs to retest the April lows within the next few sessions.

For conservative bears, waiting for a pullback to the broken support/resistance patterns might be a good idea, considering that profiting may come ahead of the weekend. For those who aren’t conservative, shorting at market still gives a decent potential R:R given the daily ATR range of around 50 – 60 pips.

For the bulls, again, there could be profit taking before the weekend that could spark a bounce, especially if U.S. housing data disappoints or we get a negative surprise catalyst for Greenback. Also, if 1.1200 is retested, that’s a more interesting level for a buy given the strong support in that area in March and April.