Last week we grabbed a perfect short entry at 1.1620 that then saw price hit our TP at 1.1500. This week I will be looking for a retrace and a further sell below 1.1500. I like a short 1.1490 with a stop loss at 1.1550 and a profit target of 1.1400. Aggressive traders can look to sell a test of 1.1400.
EUR/USD 240 min Chart - EUR/USD is Weak
The Greenback Powers Ahead
Last week was a particularly slow one on forex markets. But that all changed on Friday. We saw a big move higher in the USD on Friday and it sent the majors into freefall.
The EUR/USD was one of the worst hit and it fell below key support at 1.1500. From that point onwards, the sellers took control and pushed it all the way down to 1.1400.
There appears little on the calendar this week that will be able to save the EUR/USD. The key event is Eurozone CPI which is due out on Friday. However, given the dovish tones from ECB President Mario Draghi, I suspect even a strong result will be met with muted buying.
At the moment, it is simply a case of the US economy recovering faster than Europe and the USD is just outpacing the EUR. For the time being we need to keep our short bias.
Key Economic Data
As mentioned, all the focus is on the USD at the moment and the major data release is probably US retail sales on Wednesday. If you recall we had a strong result a month or two back, which led to a massive rally in the Greenback.
A repeat performance will spell trouble for the EUR/USD and it will likely be tough to recover from.
The EUR/USD smashed through support at 1.1500, which will now become resistance. The only issue is that there might not be enough buyers around to bring it back up to that levels.
If we hold below 1.1400, then that will attract further buying at that could see the sell-off get worse before it gets better.
EUR/USD - Key Levels
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