The EUR/USD has found its way into a trading range between 1.2200 and 1.2300. I’m looking to buy the lower end of the range at 1.2200 and for price to push into 1.2500. Our stop will be at 1.2050 which is well outside the range. With the ECB this week there's a chance of increased volatility.
EUR/USD 240 min Chart - EUR/USD is Bullish
What will the ECB Bring to the Table?
Over the weekend, all of the focus has been on the US and the Government Shutdown. Once again the two political parties couldn’t agree to terms on how to manage the country's spending. As such we’ve gone into another temporary shutdown.
Years ago under Obama, a shutdown has had a far more significant impact on financial markets. This time around it appears to be just another political stunt. As such I don’t see too much impact on the USD going forward, however there will of course be a short-term weakness. But in truth that is just keeping with the current trend.
Later in the week we have the ECB rate decision. There is likely to be no change in official rates, but traders will be keenly focused on what the ECB decides to do with the QE program. Further tapering or ending of the program is becoming increasingly likely. The program overall has failed and winding it up will see money flow back into the Euro.
Technical Analysis - The Key Levels
The EUR/USD is in a trading range between 1.2200 and 1.2300. Technically it looks like it is setting up for a push higher into the 1.2500 range. The consolidation area is an excellent opportunity to enter on what is actually shaping up as a fundamental trade.
EUR/USD - Key Levels
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