The euro is up nearly 3 percent against the dollar so far this year, largely helped by a hawkish European Central Bank and a less aggressive Federal Reserve. That changed on Friday, with the NFP report again reinforcing a tight U.S. labor market, while earnings data also rose. Because of the upcoming inflation data is more important.
Money markets have priced in the ECB, which has lowered its expectations for a rate hike of almost 70 basis points by the end of the year to 33 basis points now. This reflects uncertain global economic conditions, as well as a wobbly euro, which could end its upside rally.
EUR/USD daily price action shows that the pair is trading within a rising wedge chart pattern (black), currently testing wedge support and trading below the 1.1000 psychological barrier. Despite the higher EUR/USD, the recent decline in the RSI (Relative Strength Index) suggests that the bullish momentum is fading. This is known as a bearish/top divergence and usually points to an imminent downside. This outlook will be invalidated if the pair breaks and closes above wedge resistance in line with the 1.1096 swing high.
Pay attention to the marked place, you can see the callback when it breaks, the market is sensitive at this time, so don't trade blindly
Money markets have priced in the ECB, which has lowered its expectations for a rate hike of almost 70 basis points by the end of the year to 33 basis points now. This reflects uncertain global economic conditions, as well as a wobbly euro, which could end its upside rally.
EUR/USD daily price action shows that the pair is trading within a rising wedge chart pattern (black), currently testing wedge support and trading below the 1.1000 psychological barrier. Despite the higher EUR/USD, the recent decline in the RSI (Relative Strength Index) suggests that the bullish momentum is fading. This is known as a bearish/top divergence and usually points to an imminent downside. This outlook will be invalidated if the pair breaks and closes above wedge resistance in line with the 1.1096 swing high.
Pay attention to the marked place, you can see the callback when it breaks, the market is sensitive at this time, so don't trade blindly
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