A lack of top-tier data makes me believe that traders will focus on risk sentiment today.
Will EUR/USD start the week with an upside breakout?
Before moving on, ICYMI, I’ve put together a short recap of what happened in the markets and the major currencies on May 10 – 14. Check it out!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- UK property records continue as house prices hit new high
- G7 urged to donate ’emergency’ supplies to vaccine-sharing scheme
- UK firms seek staff after lockdown but foreign workers missing – survey
- China says retail sales grew 17.7% in April, missing expectations
- China’s factory output slows as bottlenecks crimp production
- Asia shares made hesitant by mixed China data, viral spread
- European stocks steady with focus on economic reopening
- Bitcoin lowest since February as Musk tweets trigger whipsaw trading
Upcoming Potential Catalysts on the Economic Calendar:
- Canada’s housing starts at 12:15 pm GMT
- NY manufacturing index at 12:30 pm GMT
- NAHB housing index at 2:00 pm GMT
- FOMC members Clarida, Tenreyro, and Bostic to give speeches today
What to Watch: EUR/USD
If you were around near the end of last week’s trading, then you’ll know that risk sentiment improved a bit after taking a hit earlier in the week.
With not a lot of top-tier economic reports on tap, I’m thinking that European and U.S. session traders will go with the flow and continue to price in economic reopenings in the Western countries.
A bit more risk-taking could lead EUR/USD to retest the 1.2150 handle that has been serving as resistance since late April.If EUR/USD breaks above the level, then it could target the 1.2200 psychological level or even its February highs closer to 1.2240.
But if traders start worrying about high-yielding bets again, or if traders acquire a taste for the U.S. dollar ahead of the FOMC meeting minutes release, then we could see EUR/USD drop back down to its May trend line support.
