The EUR/USD will bounce off the major support level at 1.2160. I’m looking to enter at key support with a stop loss at 1.2080 and a profit target at 1.2250.
EUR/USD 240 min Chart - Bounce off Support
ECB Rate Decision in Focus
Last week was all about politics, namely the battles between US President Donald Trump and both China and Syria. That had markets spooked for some time, before the USD staged a late rally lead by economic fundamentals.
This week much of the focus is on the ECB and what President Mario Draghi is thinking. There has been speculation for months that he’ll cut back the bond buying program. Last week, we got an inflation figure and it still isn’t as high as Draghi, and the ECB, might like.
Traders are most interested in the date of potential reductions. It’s not even about the date at which QE will end. Simply when they are thinking about winding it back.
So it appears there is no real timeline in place and I don’t expect Mario Draghi to have much to say on the matter. He hasn’t revealed anything over the last few months.
Key Economic Data
While the ECB is clearly the biggest event of the week, there is likely to be a limited impact on the EUR/USD. That’s really just because there is a low chance of gaining any new information.
However, there are a number of other data releases that will be market moving. In particular the US GDP print that is scheduled for Friday has the potential to spark the USD.
The EUR/USD spiked lower and tested the 1.2250 level on Friday. We managed to hold for the time being, but it is going to be under pressure early in the week. The USD is driving higher at the moment and I expect we are going to see a move to 1.2160 very soon. That’s the big level in focus this week, which is long-term support.
EUR/USD - Key Levels
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