August 25, 2021

Daily U.S. Session Watchlist: EUR/USD

 Has EUR/USD seen its lowest levels this week?

I’m looking at a possible short-term reversal if the risk-taking theme extends to today’s U.S. session trading.

Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Citi considering bitcoin futures trading for some institutional clients

U.S. new home sales creep up; supply, prices remain constraints

New Zealand posts 402 million NZD trade deficit in July

BOJ policymaker warns of global impact from chip crunch, Asia factory closures

Australia construction work rises 0.8% in Q2, misses forecasts

Yuan eases as Fed, PBOC policies set to diverge

AUD, NZD battle to extend gains as lockdowns drag

German business sentiment declined again in August

Upcoming Potential Catalysts on the Economic Calendar:

U.K.’s CBI realized sales at 10:00 am GMT

U.S. core durable goods orders at 12:30 pm GMT

U.S. crude oil inventories at 2:30 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: EUR/USD

I don’t know if you’ve noticed, but EUR/USD has broken above a trend line resistance that had kept the bulls contained since late July.

Will the breakout mean a short-term reversal for EUR/USD? Uncle Sam is printing its durable goods orders report later today but, if the Asian and early European sessions are any cues, then the major currencies will likely trade on risk sentiment.

Specifically, traders could continue to price in the possibility that this Friday’s Fed Jackson Hole symposium wouldn’t yield anything new about the central bank’s tapering plans.

It also doesn’t hurt risk-takers that optimists are calling a “peak” on the U.S. Delta variant cases while high-fiving China for containing its current cases.

If we see more risk-taking in the next couple of hours, then EUR/USD could remain above the 1-hour’s 200 SMA and maybe even head to the 1.1800 psychological area.

But if U.S. session traders start taking profits ahead of the Jackson Hole symposium, or if they feel like trading a mid-week reversal, then EUR/USD could dip back under the trend line resistance and head for August’s lows.