EUR/USD bulls are an control of the market, breaking above short-term resistance and a major psychological level. Will there be a chance to play the uptrend at better prices?
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on AUD/USD as the anti-dollar trend continues, so be sure to check that out to see if there is still a potential play!
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Fresh Market Headlines & Economic Data:
Dow jumps 400 points to start December, S&P 500 and Nasdaq hit record highs
Steepest improvement in U.S. operating conditions since
September 2014
ISM Manufacturing PMI declined to 57.5 in November from 59.3 in October
US construction spending jumps 1.3% in October
Global dairy prices up +4.3% since the latest auction on Nov. 17
U.S. Lawmakers unveil bipartisan $900 billion coronavirus stimulus package as stalemate drags on
Sharp expansion in Canadian manufacturing output maintained in November
Canadian economy notches record growth in third quarter
Eurozone manufacturing growth remains strong in November
Euro area annual inflation stable at -0.3%
ECB’s Schnabel Warns Against Hopes for Blockbuster Stimulus
U.K. Manufacturing sector growth improves but consumer
goods industry remains in doldrums
UK’s Gove says: there’s a chance of a no-deal Brexit
Upcoming Potential Catalysts on the Economic Calendar
ECB President Lagarde speech at 5:00 pm GMT
Fed Daly speech at 6:15 pm GMT
Fed Evans speech at 8:00 pm GMT
New Zealand Trade index at 9:45 pm GMT
RBA Governor Lowe speech at 12:00 am GMT (Dec. 2)
Australia GDP at 12:30 am GMT (Dec. 2)
Bank of Japan Amamiya speech at 1:30 am GMT (Dec. 2)
Japan Consumer Confidence at 5:00 am GMT (Dec. 2)
What to Watch: EUR/USD
On the one hour chart above of EUR/USD, we can see that the bulls were able to push above the major resistance area today around the major psychological level of 1.2000.
It’s likely today’s better-than-expected business sentiment updates from Europe were supportive of that move, as well as the continued negative sentiment on the U.S. dollar that goes back to the early stage of the pandemic.
And going forward, this trend may continue with no major catalysts ahead that could possibly derail that trend. We have a pretty light calendar ahead for both currencies, void of any major potential catalysts that we can see.
For those who think this trend will continue and that we won’t see any surprise events / news to end the trend, scaling into a long position from current levels down to the broken major price level of 1.2000 is an entry strategy to consider for a swing long position.
For the more conservative bulls who think that this run from 1.1600 to 1.2000 may be overdone, wait for a pullback to 1.2000, where we could see support if retested. Watch out for reversal patterns between 1.1960 (minor support area) – 1.2000 before considering a swing long position.
For the bears, if we do see a surprise catalysts to shift broad global risk sentiment towards negative AND the Greenback rallies broadly on the news, consider building a short position below 1.2000, but be very cautious as this is counter the broader “vaccine-driven recovery” theme that has been pushing the markets towards risk over the last month.
