Faraday Research | Jan 11, 2019 04:36AM ET
Although EUR/USD finally broke out of its range, 1.15 remains a core focus as we head towards the weekend as a close either side of it today will dictate sentiment next week.
Dovish FOMC minutes and a ‘patient’ stance from Fed members helped EUR/USD break out and remain above 1.15. We can see on the four-hour chart that a series of higher lows suggested bullish pressure was building prior to the break. And since the 1.1306 low an increasingly bullish structure has developed on the intraday chart. Furthermore, the retracement from its highs has found support near the 1.1486-1.1500 zone and, if these levels hold, bulls could soon be gunning for the 1.1622 high
However, trading just 25-pips above this pivotal zone makes it a bit too close for comfort, especially given that Euro’s average daily range this past month has been 85 pips. This means EUR/USD could finish the week with a bull-trap if US inflation data exceeds expectations enough later today.
Switching to the weekly chart shows EUR/USD is on track to close at an 11-week high. However, trading near the session high at 1.1530, an 80-pip drop from here would place it around 1.1450 to finish the week with a bearish hammer. Therefore, today’s closing price is key to sentiment next week. And US CPI could be the deciding factor.
Written By: Faraday Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.