The EUR/USD has been a little back and forth in recent times. We have some big support levels below so we will be looking for a bounce off 1.2200. Our upside target is set at 1.2350 with a stop loss in place at 1.2075.
EUR/USD 240 min Chart - EUR/USD is Holding Support
Big Week of Economic Data and Central Bank Speakers
Of recent times it’s certainly been the fundamentals that have been driving the price action in the EUR/USD. We’ve had some big drivers in the last week, coming from the FOMC and ECB minutes. The week ahead will also continue that trend.
Much of the focus has now turned to the US and the rate at which rates will increase. And even if there will be four hikes ahead this year and not three. March is all but a certainty for a rise in the states and that’s why traders are keen to hear from the new Federal Reserve Chairman Jerome Powell. He testifies in front of Congress this week and we will find out if he has any different ideas from those of Janet Yellen. Experts suggest that it should be a smooth transition, but there is still uncertainty around.
There will also be some major economic data releases to watch for. We will be getting some more insight into the state of both the Eurozone and the US with CPI and GDP figures due out. And of course we have the ever important US jobs report which will be out on Friday.
Key for the Week - Is Powell a Hawk?
Rising bond yields in the US are suggesting that we are going to be seeing some rate hikes. The 10-year yield is testing 3%. The course of action we had previously been seeing was for three rises ahead. Under Janet Yellen the economy was improving however, rates have been slow to move. Powell might very well bring rates into line faster than many anticipate.
Technical Analysis - The Key Levels
1.2500 appears to be the top for the time being. All our attention now turns to 1.2200. There has been some strong support here in the past, but if that falls then it’s fare to assume the Dollar is back on an uptrend. It also suggests that rates will be rising fast in the US while the Eurozone continues to lag.
EUR/USD - Key Levels
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