The EUR/USD will likely rise if we get some more downside in the USD. I’m looking to enter at key support at 1.2250, with a stop loss at 1.2150 and a profit target ot 1.2400.
EUR/USD 240 min Chart - EUR/USD is Turning Bullish
Can Markets Respond?
Despite the interest rate rise, the USD didn’t find any buyers last week. It was new US Federal Reserve Chairman Jerome Powell’s debut and it was one to remember. He raised rates in what is to be the first of three or even four this year. However, as mentioned the dollar fell away as the move was well and truly baked into the price.
Then later in the week, US President Donald Trump came out and proposed new tariffs against China. There are concerns around the level of abuse of intellectual property out of China and the President is looking to fight back.
That saw big falls in equities and a weakening USD. For the most part that meant we had a rising EUR/USD. Which was a little unexpected.
The question all traders will be asking on Monday is what can stop the slide. If equities continue to fall then that is going to seep into forex markets. Particularly the USD.
Key Economic Data
This week it going to be a short one thanks to the Easter break. However, there are still a couple of important data points that we have to navigate.
US GDP is likely to be the big one although we will also get a chance to have a look at the state of the German economy with their jobs data due for release.
If the momentum builds from Trump's tariffs then the data might just get overrun.
Even though there has been a lot of headlines, the EUR/USD has been in a tight trading range. We can see the bottom is really the 1.2250 with resistance at 1.2400.
I am eager to see if the USD will in fact break to the downside, which would mean we get further upside in the EUR/USD. If we can break above 1.2400 and hold then there is a good chance that we can even test 1.2500 again. I can’t see us breaking above that point going forward though as the fall in the USD is what I would consider a knee jerk move.
EUR/USD - Key Levels
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