EURUSD Forecast: It needs a catalyst to break down 1.07700 neckline
Trading the EURUSD pair is very easy and profitable lately. However, it became a very boring pair to trade since it is stuck in a narrow trading range of 100 pips.
Both, fundamentally and technically, the overview is strongly bearish.
Even the rumors of potential negative rates in the U.S, could not carry the price over 1.09000.
This Tuesday will see Federal Reserve Chairman Jerome Powell testify to Congress on the economic stimulus measures put in place so far. A day later the minutes of the Fed’s April meeting is scheduled to be released.
We all know that J.Powell and his school find the negative rates useless – even dangerous – for the economy. However; Trump’s effort and pressure on the FED may have an impact on the medium-term. That’s what the market is pricing including the XAUUSD instrument.
The Eurozone has got not a better overview than the US. Furthermore, political turmoil – such as Italy, Brexit, Germany vs ECB – is not promising for the union.
As seen on the chart, the pair is stuck between 1.08900 – 1.07700. – Here we see that MM calculation works perfect –
If J.Powell eases the negative US interest rates expectations during the testimony, we are likely to see a bearish breakout at 1.07700.
The structural target of the pattern is 1.06600. Sub targets are 1.07400 and 1.107000. The ultimate target of the harmonic swing is 1.05560.
Note: In case of a bullish breakout scenario, the neckline is 1.09850 and the target is 1.10200.
EURUSD Live Interactive Chart has been updated for the members.
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