The EUR/USD will likely continue to fall away against the USD. I’m looking to enter at key resistance at 1.2000 with a stop loss at 1.2150 and a profit target of 1.1850.
EUR/USD 240 min Chart - Falling Away
USD Doing the Damage
The last few weeks have clearly been all about the USD. The Greenback has done a huge change in trend and is now looking all but unstoppable. Interest rate hikes appear more likely by the day and even a slightly dovish FOMC couldn’t dampen the party.
US employment was a mixed bag on Friday. The headline number was weak along with wage growth. Normally that would be enough to dent the uptrend. However, what we did see was an unemployment rate that is now below 4%. And the dollar bulls decided they would take that on board.
At the same time we got a look at Eurozone inflation and once again it disappointed, missing expectations. Despite all the bond buying and historical low interest rates, inflation seems to be eluding the ECB. And that is a worry.
Key Economic Data
The key data out of the Eurozone is pretty quiet this week. So once again our attention will turn back to the USD and the economic recovery in the US.
This week the main event is clearly inflation. We get both PPI and CPI and that should give us a clearer picture of the health of the economy. Central banks around the world are worried about low inflation, with many simply not being able to raise rates as a result.
As the downtrend has been gaining steam, the EUR/USD is taking out support levels on a daily basis. We tagged 1.1900 on Friday and that will be our first area of interest.
Below that I am looking at 1.1850 and the major target for me is the swing low at 1.1750. The only way we can buck the trend is really if we see a big reversal in the USD. Which at this point in time appears unlikely.
EUR/USD - Key Levels
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