The dollar appears to be retreating from last week’s rallies, but are the trends about to resume soon?
Here’s a simple pullback play I’m seeing on EUR/USD.
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:
Crude oil opened slightly higher after failed coup attempt in Moscow, as Wagner mutiny convoys returned to bases and charges against Prigozhin dropped
Over the weekend, SNB head Jordan mentioned in an interview that latest hike was “very likely not quite” enough to calm inflation
BOJ Summary of Opinions revealed that one committee member called for an early revision of their YCC policy
BOJ policymakers also noted that there’s a strong chance CPI might moderate but not likely to fall below 2% by mid-year
S&P cut Chinese GDP forecast from 5.5% to 5.2% for the year, citing that uneven pace of growth can be expected
Price Action News
Overlay of USD Pairs 15-min
Most dollar pairs are off to a rangebound start for the week, as investors are likely positioning ahead of inflation-related releases and end-of-the-quarter profit-taking.
So far, it looks like a bit of risk-taking has returned, lifting higher-yielders like commodities and futures while keeping safe-haven rallies in check.
The Japanese yen managed to benefit from a slight change in BOJ rhetoric, as the Summary of Opinions from their latest meeting reflected suggestions to tweak policy.
German Ifo business climate index at 8:00 am GMT
SNB head Jordan’s testimony at 8:50 am GMT
ECB President Lagarde’s speech at 5:30 pm GMT
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EUR/USD 1-hour Forex Chart by TV
This pair recently fell through its ascending channel on the short-term time frames, indicating that a reversal from the uptrend is in the works.
Price is still retesting the former support zone, which happens to be right around today’s pivot point (1.0908) and the 38.2% Fibonacci retracement level.
A higher correction could reach the 50% Fib at 1.0928 or the 61.8% level near the 1.0950 minor psychological mark.
If any of these are able to keep gains in check, EUR/USD could resume the slide to the swing low or lower. Sustained bearish momentum could drag it down to S1 (1.0820) or even S2 (1.0750).
On the other hand, a move back above the trend line could pave the way for a rally up to the previous day high near R1 (1.099) or the 1.1000 major psychological mark.
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