EUR/USD Reverses Off Wednesday’s Highs

Even though the fundamental picture may be shifting for the EUR/USD, a bullish technical bias is still warranted.

EUR/USD

The currency markets have been alive today, featuring whipsaw action across the majors. One of the most interesting has been the EUR/USD, posting an intraday high near 1.1450 and low around 1.1375. While not an overly impressive trading range, the key number of 1.1400 has been hotly contested by both buyers and sellers.

So, why the action in the EUR/USD? Key fundamentals have been the story, highlighted by the releases below:

Event                                                         Actual           Projected        Previous

ECB Interest Rate Decision                        0%                   0%                      0%

U.S. Retail Sales (MoM, June)                  7.5%                 5.0%                 18.2%

NAHB Housing Market Index (July)           72                    60                      58

In short, the ECB has extended its dovish outlook and the American economy is showing signs of life. Perhaps the most telling statistic is the NAHB Housing Market Index. The number came in at 72, smashing expectations of 60. This figure suggests that buyers are snatching up U.S. real estate and lenders are excited to lend given a steady flow of 0% cash from the FED.

Today’s fundamentals point to a bearish EUR/USD. However, a market sell-off has not developed, with rates holding firm above 1.1400.

EUR/USD Pivots From Wednesday’s Highs

In a Live Market Update from earlier this month, I outlined a short trade in the EUR/USD. Although the timing was a few days off, the trade proved effective producing 38 pips.

EUR/USD, Daily Chart
EUR/USD, Daily Chart

Overview: Even though the fundamental picture may be shifting for the EUR/USD, a bullish bias is still warranted. Rates are north of 1.1400 and holding above the daily 38% Current Wave Retracement (1.1377). Until we see a significant move beneath this level, it’s best to hold longs and look for more weakness out of the USD.

ABOUT THE AUTHOR See More
Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

Related Articles

Comments

0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers