EUR/USD: 1.15 Is A Core Focus Around US Inflation Data
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.
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