Trade Ideas - Looking for the EUR/USD to hit 1.1600
Entry Point: 1.1500
Take Profit: 1.1600
Stop Loss: 1.1425
The Euro has been poking its head above some key resistance levels, but as yet hasn’t been able to consolidate itself with any certainty. The bias is still firmly bullish and any positive economic data this week has the potential to trigger a breakout to the upside. We’re looking initially for a strong close above 1.1500. This is a longer term trading opportunity.
Should price break below the 1.1450 level after testing the 1.1500 level, we have to assume there still isn’t significant buying interest at these levels.
EUR/USD Daily Chart - EUR/USD is looking to consolidate above 1.1500
Last Week - US CPI disappoints
There was a lot of data and economic news last week that shaped both the USD and the Euro.
Mid-week Janet Yellen testified at the Semiannual Monetary Policy Report before the Senate Banking Committee and the key takeaway was that the US economy was still on the road to recovery, with the potential for interest rate increases in the months ahead. This added some weakness to the EUR/USD.
However on Friday the US CPI from the Bureau of Labor Statistics came in flat at 1.6%, well below expectations and a rate that is far less than what the Federal Reserve would like to be targeting. It was the smallest gain we’ve seen since October 2016, pouring cold water on the potential for further interest rate hikes this year.
As such the EUR/USD was able to regain some lost ground from earlier in the week and set itself up for a possible charge toward the key 1.1500 level.
Key for the Week - ECB Meeting
All eyes are on Mario Draghi this week as the monthly ECB takes place. Any indication of a rate increase or even words to that effect could very well spark a move higher and test some of the key resistance levels that have been putting a damper on the EUR/USD rally.
Technical Analysis - 1.1460-70 is still valid
The 2016 highs of around 1.1460-70 are still very much in play for the EUR/USD. The strong close on Friday helped nudge us through this level but we need a strong multi-day close higher to consolidate. As it stands the EUR/USD is sitting right on key weekly resistance.
EUR/USD -Weekly Chart - The key level for the EUR/USD is still 1.1460-70 area. As it stands we are sitting right at key long term resistance.
EUR/USD - Daily Chart - Key short term support and resistance
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