Good morning traders.
Last Friday saw the eurusd test lower post the NFP and then push up to retest the 1.12 fig before hedging back and gapping lower on the Sunday open. This was due to safe haven flows into the USD after a Trump tweet on tariffs sparked concerns on the US China trade deal. Prior to this tweet we could well have seen a further push up in the eurusd but the short term landscape was tilted somewhat by the tweet.
Yesterday the eurusd coiled in a tight range just below the 1.12 handle for most the the regular trading hours session before pushing through and trading just above as we kick off this morning session.
It looks like we could get a test of the 97.00 handle on the USDx and last weeks highs at 1.1260 for the eurusd. This may not happen today but something to bear in mind as we progress through the week.
On the other hand, if we get any further blow back from the Chinese re tariffs and or the trade deal or more ´negative´tweeting from the US President on this we could see risk off gathering pace, indices start to slide further and a stronger USD. Hence we could see the euro pressured on safe haven flows – at least in the short term.
It seems then we need to be mindful of trade negotiations this week due to their ability to shift short term movements.
For today we have no news of any real significance albeit for any impromptu tweets from the White House. The same could be said for the rest of the week on the data front with no grandstand data to be announced.
That’s no problem for us as we can simply focus on the levels and do our job at a leisurely pace :).
The 240m Chart
We are starting this mornings session at around the 1.1210 level at the top of the triangle pattern. A decent opportunity would present from a break and retest of the triangle either above or below but a top boundary break looks favourite at the moment. Watch for reaction at the 1.12 fig as this should hold this morning if we are to get a push higher.
The Hour chart
Levels as per.
S1 looks good at around the 1.1180 level with main resistance coming in at the spike top just above 1.1260. I have put R1 at the top of the spike rather than at the body close as we could get a push into the wick which is 20 pips deep. Other levels are noted for possible reactions.
Have a good one.