There aren’t a lot of potential data catalysts scheduled this week, but I have a feeling that EUR/USD will see more action than the other majors.
Today I’m looking at EUR/USD possibly breaking below its descending triangle pattern.
Are you looking at the setup too?
As you can see, EUR/USD is reaching the end of a descending triangle pattern on the 1-hour time frame. The bulls are holding the 1.1760 support pretty well for now but something tells me that the bears are just waiting for the first opportunity to pounce.
We don’t have much in the way of economic data releases so traders will likely look to overall risk sentiment for direction.This means that fresh and extended lockdowns, as well as slow vaccination rates in the Eurozone, could continue to drag the euro.
Meanwhile, rising U.S. bond yields, relatively speedy vaccination schedule, and speculations over Biden’s $3 trillion infrastructure package would feed the U.S. economic recovery hype and likely push the dollar higher against most of its counterparts.
I’m looking to short just below the 1.1750 zone and then aim for 1.1650, which is right around a key inflection point on the daily chart.
If for some reason traders turn to riskier bets and take the euro higher, then I’ll also be on the lookout for a clear break above the trend line resistance, 100 SMA, and the 1.1800 major psychological handle. 1.1850 looks like a decent initial target though I’ll also look into targeting the 1.1900 – 1.1950 area.
How about you? Are you also looking into trading EUR/USD’s triangle pattern?
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