The EUR/USD faces a stiff test this week and I want to be a buyer if we sell-off. I’m looking to enter at key support at 1.2200, with a stop loss at 1.2050 and a profit target at 1.2450.
EUR/USD 240 min Chart - EUR/USD is Sliding Lower
FOMC is on the Agenda this Week
Last week all the focus was on the key CPI readings from both the US and Eurozone. For the most part, they came in in-line with expectations. That left the USD to tread its own path and it did manage to find some upside over the course of the week.
The Greenback has really been leading the charge for all the majors and that won’t change anytime soon.
This week we have another meeting of the FOMC. The March meeting was always scheduled as the one that would see rates rise for the first time in 2018. In fact, it is supposed to be the first of three hikes this year.
When new US Federal Reserve Chairman Jerome Powell, spoke to congress he was particularly bullish on the state of the economy. So much so that many felt that he would be looking to raise rates four times. With that in mind all the attention is clearly on Wednesday’s announcement.
Key for the Week - Downside Risk for the USD
The key this week isn’t so much what will happen, but rather how much is it already priced into the market. This rate hike has been so talked up, that the real risk likes in any underwhelming news at all.
If the increase doesn’t happen that’s bearish. However, it could well happen and we see the USD sink. That’s because markets already had it factored in. Similarly if Powell suggests a more dovish course of action going forward. That might mean upside for the EUR/USD.
Technical Analysis - The Key Levels
1.2200 is the level in which I’m, looking to buy the EUR/USD this week as it is major support. It’s also the point at which the slope gets a little dicey for the Euro.
Below that level we are really going to struggle to see the highs. But I suspect the EUR/USD is still on a short-term bullish trajectory.
EUR/USD - Key Levels
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