The chart shows that the euro has entered a plateau, and may decline further in the near future. The upside momentum has been very low since January, and the price has been in overbought territory for several weeks. Volume and ATR both have fallen significantly.
Based on TA alone one might expect a retreat towards the confluence between the 50 SMA, the 100% monthly Fibonacci trace around $1.07 and a resumption or acceleration of the upward movement toward $1.10. However, unexpected hawkishness from the Fed or dovishness from the ECB would drastically change this impression, so it’s critical to monitor the press conferences and Friday’s NFP.
This week’s key data
Bold This symbol indicates the most important releases.
Wednesday 1 February
- 10:00 GMT: eurozone-wide unemployment (December) – consensus 6.5%, previous 6.5%
- 10:00 GMT: eurozone-wide annual inflation (flash, January) – consensus 9%, previous 9.2%
- 10:00 GMT: eurozone-wide annual core inlfation (flash, January) – consensus 5.1%, previous 5.2%
- 13:15 GMT: ADP employment change (January) – consensus 178,000, previous 235,000
- 15:00 GMT: ISM manufacturing PMI (January) – consensus 48, previous 48.4
- 15:00 GMT: JOLTs job openings (December) – consensus 10.25…