The EUR/USD put in what was really a huge week. Thanks to a weak dollar the EUR/USD broke to the upside and the question has to be asked as to whether is can hold on this week?
The major focus of the week is clearly the FOMC. Where a rate hike in the US is all but priced. Given that fact, I feel that there isn’t much more upside to be had in the dollar in the short term. Meaning we might very well get a bit of a further push higher in the EUR/USD.
However, we have got another key US number to worry about, which is GDP. We recently saw this one revised higher at 4.2% so that might be already at the top end of expectations. A revision lower would be beneficial to the EUR/USD.
Of course, we can’t forget that we have Eurozone CPI. We are looking at a tick higher this month, where the number will be 2.1% up from 2.0%. While this is a positive, we are very much at the low end of the ECB’s target band. A beat would be a huge positive for the EUR/USD but I don’t expect that to happen.
The EUR/USD smashed through resistance at 1.1740-1.1750, before running all the way into 1.1800.
I didn’t think we would be able to run this far, to be honest, so already we have cleared some barriers. If we can hold 1.1800, then resistance really starts to get thin above and there is plenty of upside potential.
So for me, that’s the key number for the week. I want to see price hold 1.1800 and spend time there. We can then start looking at a sustained push higher. But only after we hold.
Of course, we have to break above 1.1800 first.