Interesting technical formation in the EUR/USD

Traders watching key level for a breakout opportunity.

Charts (3)

The US Dollar was bearish against most of its major pairs on Tuesday with the exception of the NZD and CAD.  

On the economic data front, the National Federation of Independent Business' Small Business Optimism Index increased to 100.6 on month in June (97.8 expected), from 94.4 in May. The Consumer Price Index rose 0.6% on month in June (+0.5% expected), from -0.1% in May.

On Wednesday, the Mortgage Bankers Association's Mortgage Applications data for the week ending July 10th is expected. Empire Manufacturing for July is expected to spike to 10.0 on month, from -0.2 in June. Industrial Production for June is expected to rise 4.4% on month, from +1.4% in May. Finally, the Federal Reserve's Beige Book is expected to be released.    

The Euro was bullish against all of its major pairs. In Europe, the U.K. Office for National Statistics has reported May GDP at +1.8% (vs +5.0% on month expected), industrial production at +6.0% on month (as expected), manufacturing production at +8.4% (vs +8.0% on month expected) and trade balance at 4.3 billion pounds (vs 800 million pounds deficit expected). ZEW survey results of July were released for Germany at -80.9 for current situation vs -65.0 expected, investment confidence was published at 59.3 vs 60 expected. The German Federal Statistical Office has posted final readings of June CPI at +0.6% (vs +0.9% on year expected). The European Commission has reported May industrial production at +12.4% (vs +15.0% on month expected). 

The Australian dollar was bullish against most of its major pairs with the exception of the EUR.

Looking at major movers, the EUR/USD jumped 55 pips to just over the 1.14 level in Tuesday's trading. Breakout plays are one of my favorite plays as a trend follower. A cup and handle continuation pattern may be forming. Price action has been consolidating since the prior uptrend took a pause. A break above key resistance at 1.1423 (Green line) could pave the way for a momentum trade towards March highs around the 1.1495 level and could signal a resumption of the uptrend in the EUR/USD.

Source: GAIN Capital, TradingView

Happy Trading

More from Forex

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account