EURUSD has moved higher for four subsequent days and is now looking to add one more bullish day since hitting our technical confluence area. In Asia, the rising industrial output of China (5.6% yoy) and Coronavirus vaccination hopes are seen as being behind the move higher in risky assets today and yesterday. Stocks are up this morning and EURUSD is moving higher for the fifth day. In yesterday’s commentary, we focused on the continuing uptrend in EURUSD and stock markets moving higher from support. These assets yet again provided long trading opportunities for our readers but didn’t reach the short term targets as it was a fairly quiet day with no major news to create volatility in the markets. The stock market fear VIX kept on moving lower. It has been falling since we identified the first signs of optimism in VIX on Wednesday’s video last week. The next big event traders are focusing on is the FOMC meeting tomorrow. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

As we’ve often noted, EURUSD is in uptrend. This is evident from a weekly chart. The daily timeframe shows how the price has bounced higher from our support at 1.1754 and is now about to challenge last Thursday’s high at 1.1917. The next significant resistance lies at 1.2011. A decisive move above 1.1917 makes it likely that the pair will move to the short-term target range (1.1960 – 1.2011) we set last week.

Cable attracted some buying near the support level at June 10th high (1.2813). This bullishness was however thwarted at long-term trendline (at 1.2900) that the pair had penetrated in Thursday’s trading last week and GBPUSD dropped back to 1.2813 support. A higher low in the 4h chart indicates there will be another attempt to break above 1.2900 resistance. Political situation (the skirmish between the EU and the UK) however, is likely to keep the most bullish passions in check and therefore without a significant change in this front it’s difficult to see sustained bull moves in this market. Until we see clear improvement in either the politics or the technical picture we remain suspicious with the rallies and favour the short side.

Slow up moves in EURUSD meant that EURAUD ended up creating a bearish shooting star candle in the daily chart yesterday. Today the pair has been moving lower as a result and is now trading below the bull channel low. Positive news from China is supporting Australian dollar today which translates to weakness in EURUSD. This is likely to be the theme for today’s trading in this pair but the lack of momentum in the weekly chart last week indicates we could see continued weakness beyond today’s trading. Both weekly and daily support levels are fairly close by so this market is in our opinion now suitable for quick intraday trades at support and resistance levels. The next key support areas are at 1.6138, 1.6177 and 1.6204 while the nearest key resistance area is at 1.6326 – 1.6335. Based on the daily timeframe chart we expect the nearest support to be broken. To take advantage of our ultra-low trading fees, register for an account and deposit here.

Recent macroeconomic data releases

  • BOC Overnight Rate, 0.25% (0.25% expected)
  • ECB Main Refinancing Rate, 0.00% (0.00% expected)
  • US Core PPI, 0.4% (0.2% expected)
  • US PPI, 0.3% (0.2% expected)
  • US Unemployment Claims, 884K (838K expected)
  • US Crude Oil Inventories, 2.0M (-3.1 expected)
  • Eurogroup Meetings
  • US CPI, 0.4% (0.3% expected)
  • US Core CPI, 0.4% (0.2% expected)

Macroeconomic data releases today

  • RBA Monetary Policy Meeting Minutes
  • UK Claimant Count Change
  • UK CPI, 0.1% expected
  • US Core Retail Sales, 1.0% expected
  • US Retail Sales, 1.1% expected
  • US Crude Oil Inventories, 2.1M expected
  • FOMC Economic Projections
  • FOMC Statement
  • US Federal Funds Rate, <0.25 expected
  • FOMC Press Conference

You may access the times and dates in the economic calendar here.

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Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

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Janne Muta
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