EURUSD Testing Key Level
EURUSD price action over recent months looks increasingly like it is building a base for a topside breakout. Following the lows printed in January the pair has since recovered and is now attempting to break out above the 1.0515 level which can be seen as the neckline of a large inverse head and shoulders pattern. Trump’s threat of 25% reciprocal tariffs against the EU this week poses a threat to EURUSD.
US Data
However, near-term focus is likely to be on incoming US data this week with preliminary GDP and weekly jobless claims due later today. Recent data weakness has kept USD anchored lower with traders rebuilding near-term easing expectations. Any further data downside today could spell trouble again for USD giving EURUSD the support to breakout.
ECB Minutes Due
Traders will also be keeping an eye on the ECB minutes due this afternoon ahead of US data. Given that the ECB was less forthcoming on the chances of further easing, there is room for the minutes to create additional support for EURUSD if we see any hawkish details. Given the hawkish sentiment we’ve heard from some ECB members recently, EUR risks look skewed to the upside going into the minutes. For EURUSD bulls, the best scenario today would be a hawkish minutes release followed by weak US data ( softer GDP, higher jobless claims).
Technical Views
EURUSD
With price potentially in an inverse head and shoulders formation, focus remains on the 1.0515 level. A break higher here will be firmly bullish, putting focus on a rally up to the 1.0724 level next, in line with bullish momentum studies readings. To the downside, 1.0365 remains key support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.