with both Eurozone CPI and US NFP reports Due to be released, you can bet I’m looking at EUR/USD this week!
The pair is trading just above the psychological handle of 1.0700, which is not surprising because we have just seen doji lines and inflection points with trend line support that bears respect on the Euro since December last year.
In this case, the trend line support (or ascending channel) is also around the 61.8% Fibonacci retracement of the March rally.
The cherry on top of this nice bullish play is a bullish divergence on the daily time frame.
EUR/USD daily forex chart Planned by TV
Can the Euro Still Extend Its Gains Against the US Dollar?
Now that US lawmakers have begun a debt ceiling deal, the markets focus could shift to guessing the next plans of the Federal Reserve and European Central Bank.
In fact, the Eurozone CPI and US Nonfarm Payrolls reports due on June 1 and 2 respectively may provide strong clues as to which central bank will have to tighten further in the next few months.
I wouldn’t rule out more USD strength this week, but until we see new catalysts, I’m betting the USD will lose some of its gains from the previous weeks.
EUR/USD, which is on the trend support line, could rebound to 1.0800 near the 100 SMA and 50% Fibonacci retracement.
The pair can reach 1.0900 or 1.1000 if we see enough momentum!
Stops below the trend line make sense for now but extending or jumping in to the upside is definitely in the plan once I see buying momentum.
what do you think? Will the Euro find sustainable support against the US Dollar?