More Consolidation For The EUR/USD

Without a doubt, this week will be one of the biggest for the EUR/USD in recent memory. Key market drivers are scheduled throughout the coming 4 ½ sessions, highlighted by a pivotal Wednesday forex session. Given the recent consolidation pattern on the daily time frame, it appears that the EUR/USD is gearing up for a directional move.

Wednesday will bring an abundance of fundamentals, especially to the EUR/USD. Here is a quick look at the schedule facing this pair for the Wednesday, 20 March forex session:

• German PPI (Feb.)
• Non-Monetary Policy ECB Meeting
• U.S. FED Monetary Policy Statement
• FOMC Economic Projections
• U.K. Parliamentary Brexit Vote

EUR/USD Technical Outlook

In many instances, the period before release of key market fundamentals proves dull. Prices show a tendency to consolidate as traders hesitate to take one side of the market or the other. This phenomenon is exactly what we seeing in the EUR/USD.

At press time, rates are hovering above these key downside support levels:

• Support(1): 62% Retracement, 1.1326
• Support(2): Bollinger MP, 1.1317
• Support(3): Daily SMA, 1.1307

Bottom Line: While anything can happen in the short-term, this market is likely to remain quiet ahead of Wednesday’s action. If so, going long from the downside support area between 1.1326 and 1.1307 offers minimal risk given a reasonable profit target.

Until the Wednesday forex session, I will have longs queued up from 1.1311. With an initial stop at 1.1284, this trade produces 25 pips on a slightly sub-1:1 risk vs reward ratio.