EUR/USD Daily Analysis: The past several days has seen EUR/USD enter a sideways consolidation pattern between 1.25-1.24, perhaps before the all important US CPI data out Wednesday, which is expected to heavily influence the Fed’s interest rate timeline. As a reminder, high inflation will lead to expectations of an early 2015 interest rate raise, while low or below expected inflation numbers will push back rate hike expectations. An interest rate hike is generally seen as a positive for the currency with the higher rate.
Long-term the trend remains bearish but the recent consolidation between 1.25-1.24 comes after a rise off of 1.2250 lows last week, and could be seen as a bullish flag pattern on the hourlies. Our forecast is neutral currently, but a break above 1.2530 would confirm the hourly bullish flag and bring our near-term price forecast to 1.2600. Below 1.2500 we remain mildly bearish and expect a return to 1.2400.
Our Preferred Trades*: We are flat on the relatively mixed outlook and will await a better setup / stronger trend in this pair. See trend forecast above for setup ideas.
Yesterday’s EURUSD SwingPRO Signal Result: Flat Friday.
Today’s SwingPRO Signal: Flat.
*CandlePRO: CandlePRO can be used in conjunction with our daily analysis and “our preferred trades.” For example, if we prefer “going short” or “selling a rally” then we would look for bearish candlestick signals after a rally or near resistance levels. Alternative if we prefer “going long” or “buying a dip” then we would look for bullish candlestick signals on price drops or near support levels.
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