The EUR/USD has started to get bearish as the USD rises. We are looking at a short position if we can push to 1.2300. Our downside target is set at 1.2100 with a stop loss in place at 1.2450.
EUR/USD 240 min Chart - EUR/USD is at the crossroads
Economic Data the Driver of the USD
US markets have seen volatility finally return. Equities have been making all the headlines after a sharp 5% correction, however, the forex world has been relatively quiet in comparison.
Things are starting to move and we’ve seen that it is the USD which appears to be the driving force at the moment. Technically the Greenback has put in a bottom and we are getting ready to break out.
There are a number of data points which will drive prices this week which include CPI, PPI and housing starts. However, the fear around further rate rises is one of the main points of focus for traders.
That was a contributing factor to the decline in equities. Even though rate rises usually mean higher markets. And certainly it contributed to an appreciating USD.
What that means is the EUR/USD will face pressure to the downside this week and the highs that are in place for now, might just stay there. That is of course unless CPI brings us a big surprise.
Technical Analysis - The Key Levels
The EUR/USD has fallen away from the most recent highs and is getting ready to test 1.2200. If we break below that level then we are back looking at a move lower. For now the highs at 1.2500 appear to be a long way off and we are unlikely to see them this week.
EUR/USD - Key Levels
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