CPI Data To Spark A Movement In EUR/USD
Axiory | Jan 12, 2022 07:22AM ET
It looks like a significant movement on the EUR/USD is about to happen soon. Will today’s CPI data be an excellent trigger for that? We’ll see.
We are looking forward to an increase in volatility because the EUR/USD is approaching the end of a rather dull sideways trend, and traders need to decide which way they want to go eventually.
The sideways trend on the EUR/USD has lasted since the second half of November. It is shaped like an ascending triangle with horizontal resistance at 1.137 (orange) and the rising dynamic support (red).
A breakout of one of those two should bring us a proper mid-term trading signal. A breakout to the upside should give us a buy signal, and a breakout to the downside should provide us with a sell signal.
In case of a breakout to the upside, there’s one additional resistance that we should be aware of. This resistance is a long-term down trendline (blue), connecting lower highs since May 2021.
Only a breakout of that resistance will bring us a legitimate and powerful buy signal on the EUR/USD; just crossing the 1,137 level may not be so significant.
The CPI data that we’ll find out soon looks like a potentially significant fundamental trigger to start one of the movements described above. In this case, we don’t have to be so patient; the data will be published soon.
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