Thanks to a general lack of market-moving data, the major currency pairs are seeing profit-taking ahead of the NFP report on Friday. USD/JPY is 100 pips below this week’s high while EUR/USD and GBP/USD are also off their highs.
The comdolls aren’t having a great time either, thanks to mixed reports in the Asian markets and expectations of a Fed taper in the next couple of months. It seems that the pound is this week’s crowd favorite (so far!) after the U.K. printed better-than-expected manufacturing and construction PMIs.
Will we see a mid-week reversal or a continuation of these price movements? We have a lot of tier 1 events yet to be released this week including the ECB, BOE, and BOC interest rate decisions, Australian and U.S. GDP reports, and Canadian employment numbers. A lot of things can happen, so we should all be prepared!
EUR/USD: Cautiously Bullish
EUR/USD looks primed for a long trade! Well, at least on a technical basis. EUR/USD is currently supported by the 100 SMA and a mid-channel support on the 1-hour chart. The question is, how will it react to the ECB’s interest rate decision tomorrow? If we see more jawboning from Draghi or positive reports from the U.S., then we could see a retest of the channel support. On the other hand, if the ECB officials finally let up on their “we aren’t out of options” speeches, then we might see the euro go back up to its intraweek highs.
Dollar Index: Bullish
This is another reason why I’m not too sure about buying the euro. USDX is not moving below the 81.100 area, which has been a major area of interest on the longer time frames. Heck, there’s even an oversold Stochastic signal right now. Which currency pairs do you think I should use if I want to buy the dollar these days? Any tip or comment will be much appreciated!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.