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#1 05-08-2019 13:15:02

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2796

EUR/USD: how does one trade the pair during a slow week such as this?

EUR/USD: how does one trade the pair during a week with few economic reports?

After a few weeks of high tension, with the recent Fed meeting, and the less-recent ECB meeting, the coming days are expected to be quite mellow in terms of economic report releases.

Not much expected to happen this week for the EUR/USD

Not many big US stats are to be released this week. And there won't be any in Europe either. And only 3 of medium-sized significance in the US.

These was the ISM of Services on Monday, the JOLTS report on US jobs on Tuesday, and the US producer prices report on Friday at 2.30pm. At this point, the producer prices report is forecasted as enhancing the dollar.

China-USA trade war is the current focus

In addition, other issues could potentially influence the EUR/USD, such as the trade dispute with the Chinese.

After Trump announced new trade tariffs last week, the market is waiting for China's answer.

Can negotiations between those nations be salvaged? Or will a full-blown trade dispute erupt which would severly stunt worldwide economic growth?

A worsening situation would likely lead to lower US interest rates, which would hurt the USD, while no FED action would enhance the USD's strength.

Keep an eye on German bonds

Lastly, German bond rates must also be kept in mind in the coming days, since they're on a downward slide and this is bad for the EUR.

The German yield curve now displays a negative rate.

An analysis of the EUR/USD

Technically speaking, as the EUR/USD displayed two bullish signals late last week, with the crossing above the psychological threshold of 1.11, and with the crossing beyond the 100-hour moving average.

If it keeps climbing, the next potential resistance will be at 1.1130, and then 1.1190-1.12.

What do the banks expect for the pair?

Commerzbank: they point to the threshold at 1.1377-60, which consists of the upper limit of a bearish tunnel, and a 55-week moving average.

Commerzbank also highlights a first resistance at 1.1176/88, ahead of a 55-day moving average at 1.1231 and a recent spike at 1.1285.

As for UBS, they forecast a range between 1.1070-1.1140 without any particular direction afterwards. 

EUR/USD hourly chart

"Anything worth having is worth going for - all the way." - J.R. Ewing



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