EUR/USD to regain bullish momentum after a small correction
The EUR/USD pair traded lower during the last week after the dovish comments from the ECB President Mario Draghi. However, the pair found buyers on the dips, and the pair traded back above the 1.3900 level. I still believe that the pair can trade higher in the coming days above the 1.40 level, and then finally trade lower. So, in the short term, I think we should look forward to buying any corrections in the pair.
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There is an up-move trend line, as can be seen in the 4 hour chart shown below. There is also an important support at around the 1.3810/00 levels, which also coincides with the trend line. If the pair retraces a bit from the current levels, reaches around the mentioned levels and forms a bullish divergence on the lower timeframe, then we can jump into a buy trade.
Initial target should be around the 1.3990 level, and final target could be above the 1.4040 level. Stop should be placed below the trend line and support region.
Major events scheduled in the upcoming week
There was mixed action in the previous week. Overall, the US dollar traded lower against most of the major currencies. The only exception was the GBPUSD pair, which traded a touch lower. The EURUSD was mostly bid during the last week, as the pair closed above the 1.39 level. Some risk correlated currency pairs like the USDJPY traded lower, as the tensions in the Ukraine made the market to take some profits. The AUDUSD and NZDUSD pairs mostly traded in a range, and looks set for a move in the upcoming week. We have the fed interest rate decision in the coming week, which will be very important in the short term.
Let us look at all major events lined up in the upcoming week.
Sunday – Australia’s Westpac consumer sentiment.
Monday – Euro zone CPI data, NY empire state manufacturing index, US industrial production and RBA monetary policy meeting.
Tuesday – Euro zone and German ZEW economic sentiment, US CPI data and Japan’s trade balance data.
Wednesday – UK employment data, MPC meeting minutes, fed interest rate decision and New Zealand GDP data.
Thursday – US initial jobless claims, US existing home sales data and Philadelphia fed manufacturing index.
Friday – Canadian CPI data, Canadian retail sales data and Euro zone consumer confidence.
This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GB/PUSD, EUR/GBP, EUR/CHF, USD/JPY, EUR/JPY, GBP/JPY, AUD/USD, NZD/USD, AUD/NZD, USD/CAD, EUR/CAD, GOLD, OIL and INDICES.