The EUR/USD is on a bit of a winning streak. Four out of the last five forex sessions have brought a green candlestick to the bulls and driven price to the 1.1800 handle. Today’s move has produced a significant 70+ pip rally. With the coming news cycle, the EUR/USD may be ready to extend the weekly range even further.

Economic Calendar

There are several key economic events scheduled for the next 24 hours that will have a dramatic impact upon this market. Here they are:

Event                                                                     Projection

E.U. GDP (QoQ, Q1)                                                      0.4%

E.U. GDP (YoY, Q1)                                                      2.5%

U.S. Continuing Jobless Claims (May 25)              1.738M

U.S. Initial Jobless Claims (June 1)                          225K

GDP statistics out of the Eurozone are the primary event to be concerned with as the U.S. overnight session unfolds. Be sure to stay tuned to my colleagues Rowan, Arslan, and Skerdian for analysis on this report when it becomes available.

EUR/USD Technical Outlook

Recent bullish participation has driven price to an area of topside resistance on the daily time frame. Depending upon the coming GDP metrics, another test of the 1.1800 handle may be in order.

Here are the levels to watch for the remainder of the forex session:

• Resistance(1): Bollinger MP, 1.1780
• Resistance(2): 62% Retracement, 1.1810
• Resistance(3): Daily SMA, 1.1816

Bottom Line: As a general rule, converging indicators are an extremely positive thing. For tomorrow’s EUR/USD market, we will have a solid resistance area to trade.

A short from just beneath the 62% retracement at 1.1804 is positive trade location to the bear. When paired with an initial stop at 1.1826, this trade yields 22 pips on a 1:1 risk vs reward scenario. This trade may also be taken as a short-term position, looking for a 1:2 payoff of 44 pips.

Upon today’s close, both the Bollinger MP and Daily SMA will be recalculated. Odds are they will tighten around the 62% level. This adds to the validity of strong resistance setting up in the 1.1810 area.

As always, play smart, watch your leverage, and trade for tomorrow!