The EUR/USD has potentially formed a base, setting the stage for a potential rally in the days to come.
The world’s most heavily-traded pair managed to defend the pivotal 1.1530 level following yesterday’s sell-off.
It has now turned positive on the week, rising above last’s week low in the process.
This therefore suggests that the bearish-looking weekly candle (inverted hammer) from the week before may have been a bear trap.
If this is the case, rates ‘should’ now go above last week’s high (1.1730/5) as that’s where the next pool of liquidity will be resting.
What happens thereafter will depend on many factors, including economic news and sentiment at the time.
But for now at least, the path of least resistance looks to be to the upside again.
This bullish view would be invalidated however if rates were to go back below that 1.1530 level.
Fundamentally, this week’s upcoming data from the US, including Friday’s all-important jobs report, should have a big impact on direction. But we continue to think that the dollar may be due a correction as most of the positivity should be priced in by now.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.