Play of the Day: Shallow Pullback Setup for EUR/USD

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EUR/USD just broke a key trend line resistance!

Will today’s catalysts provide a break-and-retest situation in the 15-minute time frame?

Check this out:

EUR/USD 15-Min Forex

EUR/USD 15-Min Forex Chart by TV

After consolidating at the 1.0800 area, EUR/USD has seen a bullish upswing and is now trading closer to the 1.0870 zone.

That’s above a trend line resistance that had been around since mid-August!

We don’t have far to look for some answers.

See, both Fed Chairman Powell and ECB President Lagarde shared hawkish statements over the Jackson Hole weekend. But thanks to this week’s U.S. data misses, Fed rate hikes are now tempered by U.S. growth concerns.

The anti-USD sentiment from the previous sessions took EUR/USD to 1.0890 but now the pair has seen some pullback.

Let’s see if today’s German and Spanish CPI reports make a dent on the euro’s gains. We already know that Australia’s CPI printed earlier today missed its estimates and pointed to a less hawkish RBA.

Oh, and don’t forget that the ADP, preliminary GDP, and pending home sales data are scheduled for release in the U.S.!

If we see more U.S. data misses, then we could see another anti-USD run among the major currencies.

EUR/USD – which already bounced just above today’s Pivot Point line and 38.2% Fibonacci retracement area – may revisit its weekly highs or make new highs above 1.0900.

Buying at current levels or somewhere closer to the 100 and 200 SMAs could yield a good risk ratio especially if EUR/USD validates its breakout and extends its intraweek upswing.

You can also target higher areas of interest like 1.0930 or 1.0950 if there’s enough pro-EUR or anti-USD momentum.

Good luck and good trading this one!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.

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About the Author: Webbey Team

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