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EUR/USD Forecast 14/01/2014

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EUR/USD Chart 14 Jan 2014
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The US dollar gets a hand from stronger than expected retail sales, for now...

Following a series of negative days after the non-farm payroll release that has surprised investors worldwide last Friday, the US currency is currently stabilizing after almost losing the 1.37 handle during the day. We favor buying daily calls on a break above the figure.

The Euro currency has staged an impressive rally during the past couple of days but it might have culminated today with the test of the 1.37 handle. 1.3699 is the daily high while the price currently trades at 1.3675. We will buy daily calls on a break above the figure in the next couple of hours.

The options that we are aiming to purchase will have expiration days today and tomorrow. however if the break does not materialize we will keep a close eye during tomorrow's morning session. An invalidation of the current scenario would become real only if we lose support levels currently around 1.3635-40.

To be diligently clear about why do we believe in this scenario it is worth to take a close look at the charts. The pair has been trading in a rather tight range since last Friday's big data release. Retail Sales figures published at 13:30 GMT today have provided some support for the Greenback, however we don't feel it is groundbreaking data.

Considering recent failure of the downside test at 1.3550 there is still room for the single European currency to go higher. That will be reinvigorated if we see a daily close above the 1.37 figure. Looking to tomorrow's data we have some Producer Price inflation data from the US which could provide fresh cues.

Meanwhile we will keep close track of price movements during the rest of the US session, as any break of 1.37 might be imminent, providing a great opportunity to trade the EUR/USD binary options forex pair.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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