The EUR/USD touched its lowest values as it went into the weekend, this after exhibiting a choppy range which saw Thursday’s move higher run into a strong reversal downward.
The EUR/USD touched its lowest values as it went into the weekend, after exhibiting a choppy range which saw Thursday’s move higher run into a strong reversal downward.
The EUR/USD will open trading this week near the 1.06765 ratios. The starting point for the currency pair will begin from near lows which were produced after a stark downward fall, this after hitting the 1.07905 ratios on Thursday. Having come within shouting distance of highs seen early on Monday, the EUR/USD suddenly reversed lower late in the week and made technical support look rather weak.
The U.S. will publish important inflation numbers this coming Tuesday via the CPI statistics and the European Union will issue its Economic Forecasts this Wednesday. The inflation numbers from the U.S. are certain to stir the EUR/USD, and technically the currency pair stands out because it is suddenly testing lows not seen since the 9th of January. Friday’s decline before going into the weekend crucially broke through lows already produced on Tuesday.
Support Levels within Sight and Ready to Test EUR/USD Speculative Tastes
The EUR/USD did create a slight reversal higher late on Friday; the currency pair did touch the 1.06665 mark a handful of hours before the close before rising. The ability of the EUR/USD to break below Tuesday’s low of nearly 1.06695 may have set off alarm bells among both bullish and bearish traders. As the EUR/USD trades near important lows, it is likely many technical and fundamental traders may believe the currency pair should not go much lower.
Having said that, the Forex market largely does not care what speculators think. The acknowledgment the EUR/USD is trading next to important mid-term support when looking at three-month charts must be considered.
The EUR/USD 1.6700 Ratio Should be Watched Carefully
- Speculative bets will certainly flourish in the EUR/USD near its current depths; bullish traders may believe a reversal higher is likely to take place.
- The 1.06700 could prove to be an important psychological level for the EUR/USD, trading below this depth could be viewed as the currency pair having been oversold by many.
- If last Friday’s lows are tested again early this week, traders may wager on reversals higher developing, but it should be remembered the EUR/USD traded below the 1.06000 level in the first week of January.
EUR/USD Weekly Outlook:
The speculative price range for EUR/USD is 1.06050 to 1.08560
Day traders may believe that technically the EUR/USD has been oversold, but they should be careful. While the mid-term looks likely to prove the EUR/USD move downwards has been an overreaction the past week of trading, it doesn’t guarantee nervous behavioral sentiment will vanish soon. The U.S Consumer Price Index numbers this Tuesday will affect the EUR/USD. If the U.S inflation numbers come in stronger than expected the EUR/USD could traverse lower.
Trading on Monday and Tuesday should be monitored closely and traders should expect volatility in the EUR/USD before and after the U.S inflation data. If the CPI numbers from the States do meet expectations or show price pressures are lessening, this could prove to be positive for the EUR/USD and spark buying of the currency pair. However, betting on the outcome of the U.S inflation data is dangerous and traders should remember that jobs numbers published from the U.S surprised the Forex market spectacularly about ten days ago and caused massive selling of the EUR/USD.
If the EUR/USD does produce durable support in the near-term and U.S inflation numbers prove weaker than expected the currency pair may react swiftly with upsides movement. Speculators need to use their risk management fully in the coming days, but if the EUR/USD proves it has upwards muscle after Tuesday’s U.S inflation numbers report, the 1.07000 level could be targeted quickly. The core piece of data for the EUR/USD will be this Tuesday and traders should pay strict attention to the results. If the EUR/USD does break above the 1.07300 mark and sustains value, traders may look optimistically for more upside and a challenge of last week’s highs.
