EUR/USD Spot Price: 1.1605
Support: 1.1580, 1.1500, 1.1453
Resistance: 1.1700, 1.1775, 1.1800
Trade Ideas - Sell the Pullback
For the last few weeks, we’ve been able to find great opportunities to the downside and the moving averages have really been holding up well. Given the extent of the down move, we again need to wait on price to pullback before entering another short trade.
Enter short on a push to 1.1650. We are still looking for a break lower and a move towards 1.1500.
EUR/USD 240 min Chart - EUR/USD has broken down
Last week was all about the ECB and what president Mario Draghi had to say on Monetary Policy in the Eurozone. As had been suggested, the ECB felt it time to reduce the rate of bond purchases, which signaled a shift in policy and one that was bearish for the Euro. That went hand in hand with more strength in the USD and as a result, it was a big slide in the EUR/USD.
The USD will be firmly in focus this week as there are two key events that will likely shape most of the majors. The FOMC will meet ahead of their decision on key interest rates along with the ever important non-farm payrolls on Friday. While it has been suggested there is likely to be no change in the official rate, if we get a statement saying that rates might rise in December, then I expect a strong rally in the USD.
Similarly if the jobs report shows that the US economy is strong, then the likelihood of that same rate rise in December only increases. In any event the USD will be the driver of the EUR/USD, and currently it is very much bullish.
As suggested previously, the real focus is not so much on what comes out of this week's FOMC meeting, but rather if they confirm that December is the month for a rate rise in the US. Any hint that December will be the month for a hike, will rally the USD and weaken the EUR/USD.
The EUR/USD has fallen all the way down to 1.1600. The next swing low is at 1.1500 so that is the obvious downside target. If we pull back above 1.1700, then it’s clear that there is some more work needed before we can reach our next major support level.
EUR/USD - Key Levels
Get the latest fundamental analyses, technical analyses and the most up to date Forex news catered to your interests.
Sign up for our weekly news and analysis newsletter.
