After achieving a 4-year low of 1.1875 last Monday, the EUR/USD closed last week at levels above 1.2100 area, shifting the pair’s near-term risk to the topside. Many experts are calling for a corrective rebound to 1.2330 and 1.2445 before we see a resumption of the main downtrend from there. I believe we could see the upper 1.2500’s reached if fundamentals continue to come in solid as they have over the last week. The consensus for this weeks’ Eurozone industrial production is for a lower amount than the previous readings, however given that April’s EU manufacturing PMI came out at a 46-month high and that German manufacturing PMI data showed its fastest sector growth since 1996 could mean there is significant upside momentum available depending on this months data. Germany and France both account for around 50% of EU growth.
So looking ahead for tomorrow we have German ZEW Economic Sentiment coming out and then on Wednesday EU CPI reports are due. As stated above, the results of those reports will either add to the current rally or stall it out. Keep in mind that there is also lots of data out of the U.S. on Wednesday (PPI and Core PPI to name a few) that could interfere with the current rally so I would advise against trading based exclusively on the data. Watch you charts and keep an eye on those key fib levels (38.2, 50, and 61.8) and previous support lines now turned resistance, especially if they sync up with weekly and daily pivots. I’ve got to be short and sweet due to some unforeseen and unwelcomed “problems” that have arisen lately so although the site might not have as many updates, I will be checking in on it just as much over the next week so feel free to leave questions and comments as always. Good luck trading!
Most Popular Posts