I’m seeing opportunities to play long and short positions on EUR/USD since the pair is trading close to several inflection points.
Think a bullish breakout could take it up to the channel top?
By the way, in case you missed it, I’ve summarized last week’s market moves in my Weekly Forex Market Recap. Check it out so you’ll know the last major headlines!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- U.S. Treasury Secretary Yellen says high interest rates would be good for economy
- Australia’s ANZ job advertisements up 7.9% in May
- S&P affirmed Australia’s AAA rating, outlook revised from ‘negative’ to ‘stable’
- Chinese iron ore imports down 8.9% in May
- Japanese leading indicators up from 102.5% to 103.0%
Upcoming Potential Catalysts on the Economic Calendar:
- U.S. consumer credit data at 7:00 pm GMT
What to Watch: EUR/USD
I’m seeing a bullish flag consolidation pattern on this pair’s short-term chart!
Will the upside momentum from last week’s downbeat NFP resume?If it does, EUR/USD could climb by the same height as the flag’s mast or roughly 80 pips. This should be enough to take the pair back up to the descending channel resistance.
Technical indicators are suggesting that the downtrend is bound to resume, so you could wait for a test of the 1.2230 area to see if bears will return.
The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside, and Stochastic is heading south so price could follow suit.
In that case, EUR/USD could retreat to the swing low near the 1.2100 major psychological mark or lower.
There are no major reports from both economies in the next few hours, but it’s worth noting that Treasury Secretary Yellen noted that high interest rates would be a plus for Uncle Sam.
Also, the ECB decision is coming up later in the week, and traders might be keen on positioning early for the event.