Although the EUR/USD closed with a slight reversal going into the weekend, the currency pair remains within the upper realm of its mid-term price range.
The EUR/USD went into the weekend near the 1.08425 ratios after demonstrating a reversal lower before going the weekend. However, on Thursday and very early on Friday the EUR/USD was able to climb to a height of nearly 1.09265 which tested the previous week’s apex values. The EUR/USD has produced a rather stubborn upward climb, while also demonstrating natural cycles lower allowing technical traders a rather intriguing window to wager.
The highs tested last week in the EUR/USD continued to knock upon the door of higher values seen in early February of this year. Intriguingly there doesn’t seem to have been an over-exuberant amount of buying in the past two weeks within the EUR/USD. The 1.10000 value of the currency pair has certainly not been challenged. Yet, some bullish speculators may view this as a good display of behavioral sentiment which may allow for a rather polite incremental upwards display to continue.
Having finished the week near the 1.08425, and resting above the 1.08400 to 1.08300 junctures may prove attractive for day traders. If the EUR/USD is able to stay above the 1.08300 level early this week it may be a sign that buying momentum remains sufficient within the currency pair and another surge higher is being anticipated.
U.S GDP and inflation numbers on Thursday and Friday of last week came in slightly below expectations, this will likely help create rather durable support for the EUR/USD. The question is where exactly the lower levels will hold and allow day traders an opportunity to pursue upwards momentum if they only want to buy the EUR/USD on perceived lows. While talk continues to be heard that the U.S. Federal Reserve will raise Federal Funds Rate in early May by another 0.25%, some analysts watching U.S. economic data may suspect this will be the last hike for a while.
The challenge and ability to climb above the 1.09000 level in the last couple of weeks only to be pushed backward is tantalizing. Day traders should certainly not be looking for targets near the 1.09000 level as a take profit unless they have extremely deep pockets and the ability to withstand overnight carrying charges, but they can look at the ratio and wonder if this higher mark will be touched sooner rather than later.
This will be a short trading week for many financial institutions because of the Good Friday holiday on the 7th of April. Financial houses may try to position themselves before the holiday. Also, important data will come from the U.S. on Friday which may see a hard-to-interpret reaction if financial houses are not operating in full.
- The U.S. will release its Non-Farm Employment Change numbers and Average Hourly Earnings statistics this coming Friday.
- Many European financial houses will be closed this coming Friday, which means volumes in the EUR/USD may become unbalanced and volatility could last into the following week.
The speculative price range for EUR/USD is 1.07210 to 1.09400
The support levels of the EUR/USD have shown to be rather strong. Last week’s low was produced on Monday when the EUR/USD was near the 1.07450 ratio. The incremental climb higher off of this depth was helped by a lack of drama within the European corporate banking sector. The behavioral sentiment was rather solid and this certainly helped attain buying momentum in the EUR/USD.
Traders looking for a downside this coming week should be careful if they are wagering on technical reversals lower. If the 1.83000 falters, it is possible the 1.08100 to 1.07900 marks could produce a challenge, but these levels may also be viewed as potential buying grounds for EUR/USD traders who think the trend higher in the currency pair is going to be sustained in the coming week.
If the EUR/USD is able to maintain current support levels early this week, wagers on higher values would not be a surprise. Traders as always are urged to use solid risk management. The fact that the Non-Farm Employment Change numbers will be released into a lightly traded market this coming Friday will produce fireworks of volatility.
