The Euro is consolidating its gains before the ECB meeting later in the week
The single currency for the Euro Zone is currently defying its daily range which seems to be between 1.3580-85 and 1.3615-20 for now. We are biased to buy calls if the price dips to 1.3570-80 area.
The EUR/USD pair is likely to test thew upside later during the day
A test on the downside is only likely if the numbers out of the US later today prove to be a good surprise. The data out of Europe proved to be on the positive side with the sole exception being Spain, where manufacturing has pulled back into contraction territory.
Looking ahead to the US session Ben Bernanke is scheduled to speak at 13:30 GMT with the key data being released later at 15:00 GMT with construction spending and ISM manufacturing. The consensus for the ISM index is slated at 55.
If we see a number even stronger than that the EUR/USD binary options forex pair might fall towards 1.3530-40. Current trading is already approaching the lower end of our call buying point at 1.3575, so we would advise traders to invest cautiously by buying hourly calls here and below to 1.3570.
The week is likely to be very volatile because of the potential for surprises out of the European Central Bank of Thursday. For now we remain bullish on the pair and are waiting for further developments. If the pair breaks below 1.3560 we would be reversing our call to buy put options at 1.3575 on an hourly basis.