This pair is closing in on the top of its short-term range ahead of what appears to be a data-light session.
Will the resistance hold or fold?
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:
Treasury Sec Yellen: U.S. not losing control of inflation
Asian shares advance as Evergrande woes ease
China to probe energy producers and energy price index providers
ECB policymaker de Cos: Relatively high inflation to last in the coming months
German Ifo business climate index down from 98.8 to 97.7 vs. 98.2 forecast
Upcoming Potential Catalysts on the Economic Calendar:
BOE MPC member Tenreyro’s speech at 1:00 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
The coast is clear in terms of top-tier economic reports today, so EUR/USD might simply stay inside its short-term range.
Or will it?
Risk appetite seems to be in play so far, as Asian markets are advancing ahead of another round of U.S. earnings reports.
Traders might also be pricing in expectations for a weak U.S. Q3 advanced GDP later in the week, as well as a slight slowdown in price pressures as indicated by the core PCE price index.
A break higher could take EUR/USD up by the same height as the chart formation, which spans roughly 50 pips.
The 100 SMA is above the 200 SMA to hint that the path of least resistance is to the upside or that resistance is more likely to break than to hold. However, Stochastic is already hanging around the overbought zone to reflect exhaustion among buyers.
If resistance holds, EUR/USD could slide back to the bottom of the range at 1.1620. Germany just reported another dip in business sentiment earlier on, as companies are worried about supply chain disruptions.
