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EUR/USD Forecast 12/11/2013

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EUR/USD Chart 12/11/2013
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Binary options on the forex pair EUR/USD continues its consolidation.

We are revisiting our yesterday call for selling at 1.3420. The risks for a correction to the upside have increased. We would be buying daily calls at or below current levels and buy hourly calls on a sustained break above 1.3410.

The Euro pair bounced up to levels close to 1.3415 in late trading yesterday as it became clear on Monday that the political forces in Germany have agreed on a framework for the Eurozone banking union. This is very likely to be the main topic of discussion at the Eurogroup finance ministers meeting this Friday.

The pair shed yesterday’s gains to trade as low as 1.3359 this morning after Germany reported a lower than expected Consumer Price Index (CPI) numbers. Italy countered with higher than expected print on the same data at 09:00 GMT and the pair consolidated for a bit before spiking higher above 1.3400 as we were writing this article.

The pair is currently trading around 1.3386 and we would be cautiously buying calls should we see a sustained break above 1.3410. On the downside, if the pair manages to break 1.3350, the pair should continue to move lower.

The calendar provides little US data today with no significant releases, with probably the only one deserving a little attention being the Chicago Fed National Activity Index. Last month’s number was at 0.14 with no forecasts provided for this sort of data. More aggressive players could try to buy calls at levels around 1.3350-60, but we would be very careful in doing so.

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