EUR/USD Spot Price: 1.1865
Support: 1.1850, 1.1812, 1.1800
Resistance: 1.1928, 1.1942, 1.1957
Trade Ideas - USD Strength
The EUR/USD has had a lot of choppy action in the last week. As a result we need to take a longer-term perspective and move to a higher time-frame.
I’m looking to enter short on a rally to 1.1950. We would expect to see USD strength coming back into the market and a sell-off in the EUR/USD. Downside target of 1.1550 with a stop loss at 1.2100.
EUR/USD 240 min Chart - EUR/USD is Topping Out
Last week we managed to get some very mixed price action in the EUR/USD. It was tough to determine direction and for the most part, the price action was choppy. However over the weekend one of the big long-term drivers, tax reform, has started to make progress.
US President Donald Trump is attempting to reform the US tax system, with a big focus on cutting the rate of corporate taxes to 20% from 35%. If successful this will see billions pouring back into the US economy and that will be a big boost to both the US stock market as well as USD. The bill made a huge leap forward over the weekend as it passed the Senate, on Saturday. There’s now a chance this could become a reality by Christmas.
This week traders also have navigate non-farm payrolls. There is a strong chance that rates will be hiked at the December meeting of the FOMC and a strong number will virtually confirm this.
The big number that everyone will be watching will be US unemployment. With hurricanes in the US impacting the last few results, the numbers from November might be the first opportunity to get a clearer picture of the state of the US economy.
The EUR/USD has rallied from the lows and has been strong over the recent weeks. As we move into December there are a number of drivers that will keep the USD strong and that should mean 1.2000 will be the key upper resistance level. Below we could see a move back below 1.1700 which puts us back into bearish territory.
EUR/USD - Key Levels
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