Forex saw several currency pairs post a bullish start to the week yesterday, and EUR USD was one of those that benefited the most from the positive sentiment in the currency market. As the week started around 1.1760 for the Euro Dollar on Sunday evening, the pair climbed to a high of 1.1817 yesterday afternoon, and is holding above the psychological level of 1.18 for now on Tuesday.
Against this backdrop, traders are wondering if the movement will continue today, or whether we should expect a correction in the EUR USD on the forex. Let’s study the fundamental and technical factors to try to answer this question.
Two key statistics in today’s Forex calendar
From a fundamental analysis point of view, it should be noted that today’s economic calendar does not include any important European statistics, but will instead feature two key US indicators.
Investors in the currency market will in fact wait for June’s US durable goods orders at 2:30 p.m. The consensus of economists foresees an increase of 0.8% for main orders, after + 0.3% previously.
At 4:00 p.m., the forex market will then turn its attention to the Conference Board’s Consumer Confidence Index. Economists expect the index to fall to 123.9 points for July, from 127.3 in June.
In addition, it will be recalled that the two-day Fed meeting starts today, with a press release scheduled for tomorrow at 8 p.m. and a press conference by Jerome Powell which will begin 30 minutes later.
Thus, some restraint could be observed on Forex on Tuesday, investors awaiting the Fed’s conclusions to take a more frank position on currencies.
What is the technical background on EUR / USD?
Although the chart profile of the Euro Dollar has improved markedly with yesterday’s rise, there are still some hurdles to overcome before we can bet on a lasting upside to the worst in forex.
The EUR / USD pair broke above a downtrend line, as well as above its 100 and 200 hour moving averages, thus confirming 3 bullish signals. short term.
However, we also note that the 1.1820 / 30 area has ended several rebounds for almost 2 weeks. Thus, the EUR USD pair has yet to cross this threshold to confirm the bullish outlook.
If it succeeds, the probability of a rise in directions of 1.22 will increase. This represents upside potential of around 400 pips from the current price. Note, however, that other potential short term resistances can be found at 1.1850, 1.1880 and 1.19.
Indeed, as seen on the daily chart above, the EUR / USD pair took support on the lower bound of a long-term triangle to display its current rebound. If the movement continues towards the upper bound, this will suggest a target towards 1.22.
Of course, before that, the threshold of 1.20 could also offer some resistance.
Finally, in the event of the Euro Dollar falling on the Forex this Tuesday, we will take into account an immediate support at 1.118, before a much greater support threshold towards 1.1750, a threshold below which 1.17 will then probably be targeted by traders.