I want to get long at 1.1730 with a stop loss at 1.1690 and a profit target of 1.1850. This is more of a breakout trade.
EUR/USD 240 min Chart - EUR/USD is Up
FOMC in Focus
The EUR/USD made a big run last week and it was largely on the back of a tumble in the Greenback. The USD fell away sharply which opened the door for a number of the major currencies to rally.
The ongoing trade wars took another big turn as President Trump decided to roll out more tariffs on China. However, it appears the news is finally starting to weigh on the USD.
This week the FOMC meets in what many are suggesting is an all but certain interest rate hike in the US. Given the September hike is virtually priced in I expect to see little by way of upside on the back of a hike.
There are some other key US announcements that might make a difference though and I think GDP is the most important. Just last month we saw GDP revised higher to 4.2% and that is pushing towards the top end of what we might expect. So if that number was to fall then we might even get another jump in the EUR/USD.
Key Economic Data
On the local front, clearly the most important piece of data this week is Eurozone CPI. We are expecting a slight rise this month at 2.1% which is up from the previous reading of 2.0%.
That is a positive for the Eurozone, however, we have to understand that this is the very end of the ECB’s target band. So until we start seeing some more progress I expect Mario Draghi to be unhappy.
The EUR/USD cleared virtually all resistance that stood in its path last week. Only failing at the final hurdle, which was 1.1800. If we can now see price hold above the 1.1800 level, then I expect there will be little standing in the way of the EUR/USD breaking out much further to the upside.
That said, we still need to break and hold above 1.1800. It really is the last line of defense and will take some work to do.
EUR/USD - Key Levels
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