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Will recent European sentiment data and upcoming U.S. retail sales data push EUR/USD out of this consolidation pattern?

Intermarket Snapshot

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Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Fed’s George speaks in Minneapolis  at 3:45 pm GMT
  • Fed’s Daly speaks in Evanston at 11:00 pm GMT
  • Australia consumer sentiment at 1:30 am GMT (May 15)
  • China retail sales & industrial production at 2:00 am GMT (May 15)
  • Australia wage price index at 2:30 am GMT (May 15)
  • German GDP at 7:00 am GMT (May 15)
  • Canada CPI at 1:30 pm GMT (May 15)
  • U.S. retail sales & Empire State manufacturing index at 1:30 pm GMT (May 15)

What to Watch: EUR/USD

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

On the one hour chart above, we can see that EUR/USD has been consolidating and now forming a rising triangle pattern of rising ‘lows’ starting to put pressure on resistance around the 1.1250 minor psychological level. So, the thought is that this pair could be ready to breakout out in either direction, and we just need a catalyst to get traders to make some moves.

The longer-term downtrend going all the way back to the beginning of 2018 gives the bears a slight edge for a downside break, especially with the latest economic data and sentiment from Europe coming in weaker-than-expected. So, if you’re a bull, watch out for a downside break of the rising ‘lows’ pattern, and if tomorrow’s U.S. retail sales data manages to beat expectations of a downtick from the previous month’s data, this pair could have fresh legs to run and retest the early May swing lows around 1.1140 – 1.1170.

If you’re a bull, look for the combination of an upside break of the 1.1250 handle coupled with an expected weak U.S. retail sales update before considering a long position on EUR/USD. If an upside break occurs and holds, then targeting the April highs around 1.1320 gives a solid potential return-on-risk if using the daily ATR of around 70 – 80 pips as an invalidation tool.