Economic Events Outlook, Jan 29 – How to Trade the EUR/USD Today?

Posted Tuesday, January 29, 2019 by
Arslan Butt • 2 min read
  • The dollar was steady against a bucket of currencies; the dovish FOMC sentiment is keeping it under pressure.
  • Trade talks between China and the United States stay in the limelight.
  • US CB Consumer Confidence ready to bring some action today.
  • How to trade the EUR/USD today?

On Monday, the Greenback edged down against most major currencies. Seems like investors are awaiting news from the US and China who are scheduled to talk on Tuesday and Wednesday. Let’s wait and watch if the world’s largest economies can reach an agreement on trade.

Potential Economic Events to Impact

EUR – Spanish Unemployment Rate

The National Statistics Institute is due to release the Spanish unemployment rate at 8:00 (GMT) with a slightly positive forecast of 14.5%, while the Spanish unemployment rate was 14.6% in October. Let’s see if it gives some hope to the Eurozone economy.

USD – CB Consumer Confidence
One of the important events due today is the consumer confidence on US economy. For your info, it’s a survey of about 5k households which asks respondents to rate the relative level of current and future economic conditions, including labor availability, business conditions, and overall economic situation.

Let me simplify it for you: a consumer with a higher level of confidence on the economic growth tends to spend more, as compared to rest of the folks. Therefore, the higher level of consumer confidence can lead to a higher level of inflation, GDP and ultimately, better employment status. The data is due at 15:00 (GMT) – economists are expecting a drop in consumer confidence from 128.1 to 125. It seems like the prolonged partial shutdown of the US government has hurt the market sentiment. The dollar is likely to stay under pressure this week.

EUR/USD – Eurozone Crises Weigh on the Single Currency

The Eurozone continues to struggle as its lending growth held steady last month. Germany, France, and Italy, the three biggest economies in the Eurozone, were hardly growing in the last quarter. While the market sentiment indicators are going sick.

So this somehow supports the ECB’s argument that the EU is experiencing a slowdown. This also supports the sentiment that the rate hike isn’t near, adding further selling pressure on the single currency Euro.

Technical Outlook

  • Technically, the EUR/USD is consolidating in a thin trading range of $1.1450 – $1.1400.
  • The RSI and Stochastics are in the overbought zone, sending a signal that there’s no room for buying until we see a retracement.
  • The pattern is extending strong support to the direct currency pair above $1.1385. While on the upper side, the resistance prevails at $1.1450.
  • While the 20 periods EMA is indicating a bullish trend in the EUR/USD.

Thing is, the market is confusing at the moment as traders are eyeing the US-China trade talks, NFP, and FOMC which are due later this week.

Support   Resistance
1.1397       1.145
1.1366       1.1474
1.1313       1.1528
Key Trading Level: 1.142

EUR/USD – Trade Plan

The idea is to stay bearish below $1.1435 with a stop loss above $1.1460 and take profit at $1.1395 and $1.1380. While buying is preferred above $1.1375 for quick take profit of around 50 pips.

Good luck!

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