The EUR/USD will likely continue to suffer against the USD. I’m looking to enter at key resistance at 1.2150 with a stop loss at 1.2250 and a profit target of 1.1950.
EUR/USD 240 min Chart - Heading Lower
US Data in Focus
Last week, we were waiting intently for any signs of life from Mario Draghi and the ECB. Unfortunately for EUR/USD bulls that wasn’t forthcoming and the signals coming out of Europe are well and truly dovish.
That sent the EUR/USD tumbling and it wasn’t helped by a USD that is on the up. This week brings more worries and we are faced with two of the biggest events of the month. That is the FOMC interest rate decision and US employment.
If we get word that there is still three rate hikes ahead, then I expect to see significant upside in the USD. Similarly if we get a strong jobs report which includes good wage growth, then the Greenback will likely get moving.
Key Economic Data
Despite the two headline numbers that many will be following, we are also going to need to pay close attention to the Eurozone Inflation figure. Inflation, or more correctly a lack of inflation, is at the heart of the problems in Europe.
We aren’t expecting miracles just yet, but a headline number above 1.3% would be a massive boost for both Mario Draghi and the ECB. The reality is that they can’t stop their bond purchases until progress is made. The bond buying is hurting the value of the Euro and it is also looking more and more untenable as yields rise elsewhere around the world.
The EUR/USD has smashed through the support levels that we’ve been focused on and now we are clearly in a bearish mode. The next major support level of interest is 1.2050 and then 1.1950. 1.1910 is the real downside target now as it is the swing low.
EUR/USD - Key Levels
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