EURUSD H4 Chart Technical Overview
The U.S. is closed due to the 4th of July Holiday.
Eurozone Retail Sales data will be released.
Low Liquidity / High Volatility Risk.
Markets are focused on the NFP of Friday.
Yesterday’s the U.S. data set was mixed. ADP and ISM Manufacturing Index came below the expectations while the Markit Composite PMI and Services PMI were above the expectations.
It was broadly brushed off by markets, save for a fall in the dollar, but U.S. President Donald Trump went on the attack against the European Union and China by calling them currency manipulators only days after the trade ceasefire was agreed. The tweet raised questions about whether the U.S. Treasury could intervene in currency markets, something it hasn’t done since 2011. The Federal Reserve, so often the target of Trump’s ire, is also getting a clear signal from bond markets that inflation is not going to heat up on its own and intervention of the monetary policy kind might just be needed.
Trump said Europe (and China) are playing a “big currency manipulation game” and America should match their efforts “or continue being dummies”. Just last month Trump blasted ECB President Mario Draghi for weakening the single currency, something he likely wishes the Fed’s Jerome Powell could do to the dollar. While traders don’t seem to be backing Trump’s goal of a weaker dollar — speculative positioning remains net short the euro — the comments and some mixed U.S. data helped support the common currency.Euro bulls will be hoping for a further boost should U.S. jobs data Friday disappoint, after Wednesday’s ADP employment figures came in below expectations.
The fact is ” Nobody wants a stronger local currency ”
EURUSD was trading at 1.12800 below SMA 100 and EMA 50 H4 Chart as of writing. SMA 200 1.12500 acts as support.
It is trading in a rising channel and we need to see a clear breakout of the channel in order to speak about a fresh sell-off. This fresh sell-off may be started at the breakout of 1.12200.
On the upside, 1.13200 resistance is important for the intraday traders. Break above 1.13200 would carry the price 1.13400 – 1.13600. Under current fundamental conditions, it would be very difficult to break above 1.13600.
We have two bearish patterns to use for selling the opportunity of potential pullbacks toward 1.13600. I have shared them yesterday. I will update according to the price action.
On the smaller charts, we have an emerging inverse head and shoulders pattern which can be used as a buying opportunity. Estimated breakout level is 1.13080. – I will post it –
A better than expected Retail Sales data may send the prices above 1.13200.
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