A Possible Correction For The EUR/USD

As we can see, the Euro is rising against the USD. This might be a correction due to the recent financial and political data released by both U.S. and Europe.

The European countries are struggling with low inflation levels and the ECB announced a warning of deflation dangers; as falling oil prices could push the European Union countries’ inflation into negative territory.

Here are the major Resistance (R) & Support (S) levels of the EUR/USD:

S2 S1 Pivot Point R1 R2
1.2309 1.2380 1.2450 1.2545 1.2640


As for today’s figures, starting with Switzerland, the Swiss National Bank (SNB) governing board members will come to a consensus on where to set the target range for the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in the currency valuation.

· Forecast: 0.13%
· Previous: 0.25%

A higher than expected rate is positive for the CHF, while a lower than expected rate is negative for the CHF.

The Swiss National Bank (SNB) Chairman Thomas Jordan is expected to speak today. Being the head of the SNB Governing Board, which sets the short term interest rates, he has a major influence over the value of the Swiss Franc’s value than any other person. Traders watch his speeches closely as they are often used to drop subtle hints regarding future monetary policy and interest rate shifts. His comments may determine a short-term positive or negative trend.

Moving to Canada, Bank of Canada’s (BOC) Governor, Stephen Poloz is also expected to speak today. As the head of the BOC's Governing Council, which controls key short term interest rates, Poloz has more influence over the Canadian Dollar's value than any other person. Traders scrutinize his public engagements for clues regarding future monetary policy. His comments may determine a short-term positive or negative trend.

As for the U.S., the Retail Sales announcement will be released; measuring the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of the consumer spending, which accounts for the majority of the overall economic activity.

· Forecast: 0.4%
· Previous: 0.3%

A higher than expected reading should be taken as positive for the USD, while a lower than expected reading should be taken as negative for the USD.

We wish you luck in your trading activities.

Disclaimer: The prices and news mentioned in this outlook are absolutely no guarantee of future market performance. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades. Engaging in CFDs or Spot FX carries a high risk to your capital. You should not engage in this form of investing unless you understand the nature of the Transaction you are entering into and the true extent of your exposure to the risk of loss. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based.