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There aren’t a lot of top-tier reports scheduled in the U.S. session, so I’m looking to the Eurozone’s PMIs to provide volatility for majors like EUR/USD.

Will today’s headlines push EUR/USD to key pullback levels?

Before moving on, ICYMI, I’ve summarized last week’s market events on my weekly market recap. Be sure to check that out before you place any trades this week!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • Canada’s manufacturing PMI at 1:30 pm GMT
  • U.S. ISM manufacturing PMI at 2:00 pm GMT
  • U.S. final Markit manufacturing PMI at 2:00 pm GMT
  • Fed’s Powell to participate in an online conference at 6:20 pm GMT

What to Watch: EUR/USD

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

As you can see, EUR/USD recently broke below a trend line that had supported the pair for most of April.

The euro found support just above the 1.2000 zone, however, and now it looks ready for some bullish moves.

Today I’m looking to enter a possible short-term reversal for EUR/USD. That is, I’m not expecting the pair to return to its uptrend this week.

For one thing, last week’s Eurozone growth numbers underscored the impact of prolonged lockdown restrictions in the region.

Meanwhile, Powell and other Fed members are facing increasing pressure to at least talk tapering or tightening amidst strong growth numbers in the U.S. I know non-voting member Robert Kaplan is already there.

The 1.2060 – 1.2100 zone looks like a good area to short because it’s also around the SMAs and major Fib retracement levels on the 1-hour time frame. If hit, I can initially target the 1.2000 lows though I’m open to holding the short until there’s sustained bullish pressure.

But traders may want more risk in the next few days. If a risk-on environment persists, then I will also consider entering EUR/USD’s uptrend as soon as it trades above its broken trend line support again.