EUR/USD waiting for signals
EUR/USD is consolidating around $1.3060, capped by the 55- and 200-day SMAs at $1.3070/75. Yesterday the pair formed a strong “bullish engulfing” candle, strengthening from the $1.3000 support.
We have already said that this week the trade may be volatile because of the forthcoming ECB meeting and key US employment data. The next resistance is seen at $1.3100 (100-week MA). A break above this level could open the way for a higher correction to $1.3200 (April highs), but this resistance is expected to hold.
Break through the key $1.3000 support would pave the ground for our initial bearish target at $1.2850. Westpac analysts expect this level to be hit intraweek as ECB’s Mario Draghi is expected to sound more dovish this time.
Today there is no important events on the EU agenda, except for the Spanish unemployment change (figure showed improvement). In the US watch factory orders and speeches of the FOMC membersDudley and Powell.
Chart. Daily EUR/USD