EUR/USD Pair Breached Important Up-Move Trend Line

Let’s start the year with an interesting opportunity for EUR/USD. The pair has breached an important up-move trend line, as plotted on the 4 hour chart shown below. I think this trend line may now act as a resistance. So, any rallies may provide us a sell opportunity.
EUR/USD Hourly Chart" title="EUR/USD Hourly Chart" width="452" height="661">
I think the pair can move a bit higher from the current levels, and form a duplication of the current wave, as highlighted in the 4 hour chart below. After this move, the pair might continue to move lower. So, once the pair moves higher, makes a stop at around the 1.3700 level and forms a bearish divergence, then we will enter into a sell trade.
EUR/USD Hourly Chart" title="EUR/USD Hourly Chart" width="452" height="661">
Initial target should be the last low at around the 1.3560 level as shown below, and final target could be around the 1.3450/30 levels. Stop should be triggered on a close above the broken trend line.
EUR/USD Hour Chart" title="EUR/USD Hour Chart" width="452" height="661">


Reviewing last week’s events
There were some economic events released for the US in the last week, including the pending home sales data, CB consumer confidence data and ISM manufacturing PMI. The data was satisfactory, as the consumer confidence jumped from 72.0 to 78.1 and ISM manufacturing PMI came as expected. The US dollar was seen gaining some ground against the Euro and the pound. The EUR/USD traded below the 1.3650 level, and the GBP/USD pair traded below the 1.6500 level.

Fundamental Outlook for the day
Today we have the US trade balance data scheduled during the NY session along with Canadian trade balance data. The Canadian Ivey PMI will also be released later during the day, which is expected to rise from 53.7 to 55.0. Other than this, the Investor’s Business Daily (IBD), TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism Index is also lined up in the US session. Let’s wait and see whether the US dollar can gain some more ground or not.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: the GBP/USD, USD/CAD, EUR/JPY and AUD/USD.