EURUSD In Holding Pattern
Following the heavy sell off seen across recent months, EURUSD has settled into a tight block of consolidation over recent weeks. Sitting within the lower end of the bear channel, price is current framed by a triangle pattern, highlighting the consolidation. With this in mind I am watching two scenarios. The first is a straightforward breakdown and continuation of the bear trend below 1.1190, targeting 1.10 initially. The other option is a short squeeze higher into a test of the broken lows and bear channel top around 1.1527. If we test that zone, I will be watching for reversal patterns to initiate a trend resumption trade. Retail market currently around 70% long, favouring the downside break for now though if this shifts, could support a move higher near term.
Keep An Eye On
With both the Fed and the ECB meeting this week there is the potential for fireworks in this pair. Broadly speaking, the expectations are in favour of a hawkish Fed outcome and a dovish ECB outcome, supporting the idea of a straightforward breakdown trade. Any surprises, however, might be what pave the way for a squeeze higher into that upper zone. So, plenty to keep an eye on!
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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.