Just a day before the crucial ECB meeting we are targeting the next move
For today the majority of factors form the European session have already been priced in to the market price. We are of the opinion that the Euro is going to hold strong in the coming sessions including after the ECB rates decision, however some caution is advised tomorrow. That doesn't mean that we can't trade today freely - read further to gather our direction.
The main issue surrounding the Euro this morning has been the release of weaker than expected services PMI numbers. This puts the ongoing recovery in the services sector of the Euro Zone economy into question as we are gathering substantial speed in the US.
However as we look at the charts and having in mind the ECB meeting tomorrow, for now we are very unlikely to get something materially bullish for the US dollar. Just minutes ago we received the latest data on the Trade Balance in the US. The resulting figure was wider than expected and the ADP private employment survey was also weak.
At +179,000 jobs in the month of May this marks a lower number than last month's reading of +215,000. The dollar went on to test 1.3640 on the news, but failed and pulled back, trading currently around 1.3630. We would be purchasing daily call options at current levels and look forward to get more.
The crucial level to the upside is at 1.3650 which was tested couple of times in recent sessions. As the pair is gearing for another run higher and all the negative news for the single European currency are already priced into this binary options forex pair, it is time for us to take a look at what happens if prices fall below 1.36.
Well in this case we would be reversing our call and start buying put options for today as it will be very tough for the Euro to suffer another defiant on an approach to 1.3650. The theme for now is positive, with the crucial component in terms of news being the services sector ISM release which is scheduled for 14:00 GMT.