EUR/USD pair found sellers during the last week, as the pair broke a critical support level to trade lower.
The pair is now bouncing from the weekly 20 moving average and opposite band of Bollinger Bands® on the daily chart. I still feel that the down-move is not over in the pair, and every major rally should present us a sell opportunity. There is a stiff resistance for the pair, as can be seen in the chart below.
There is a bearish trend line on the 4 hour chart connecting all major previous highs. There is also a resistance area at around the 1.3830/50 levels. If the pair trades a bit higher from the current levels, struggles around the resistance zone and forms a bearish divergence, then we can consider entering into a sell trade. Remember, the pair should respect the last high at around the 1.3870 for this trade setup to be valid.
Initial target should be around the 1.3650, and final target could be around the 1.3600 level. Stop should be placed above the 1.3880 level.
Major events scheduled in the upcoming week
The market was mostly quiet during the last week except for the AUD/USD and NZD/USD pairs. They both found buyers and managed to trade higher. The AUD/USD traded as high as 0.9294 and NZD/USD traded above the 0.8650 level. The EUR/USD pair was comparatively weaker, as the uncertainty weighed on the pair. GBP/USD managed to gain some ground after the better than expected retail sales data pushed the pair above the 1.6620 level. There are several important events scheduled during the upcoming week, which can play an important role.
Let us look at all major events lined up in the upcoming week.
Sunday – Japan industrial production data, New Zealand’s building consents data and Australia’s HIA new home sales figures.
Monday – German retail sales, French GDP, Euro zone CPI, Canadian GDP and RBA interest rate decision.
Tuesday – German and Euro zone unemployment data, UK manufacturing PMI and US ISM manufacturing PMI.
Wednesday – Euro zone GDP data, US ADP nonfarm employment change, US factory orders, Australia’s retail sales and Chinese HSBC services PMI.
Thursday – UK services PMI, Euro zone retail sales, ECB interest rate decision, US initial jobless claims, US trade balance and US ISM non-manufacturing PMI.
Friday – German factory orders, Canadian unemployment rate, US nonfarm payrolls data, US unemployment rate and Canada’s Ivey PMI.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: USD/JPY, USD/CAD, EUR/CAD, EUR/CHF, AUD/USD, NZD/USD, EUR/AUD, USD/TRY, EUR/TRY and USD/ZAR.