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EUR/USD Forecast 16/01/2014

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EUR/USD Chart 16 Jan 2014
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The Euro is holding its ground after poor US housing data

It has been a quite day for the most traded forex pair around the market. The Euro has been trading between 1.3583 and 1.3649 for the most part of the day. We are looking forward to play some calls in the coming hours. Our preferred level is 1.3600.

The Euro has managed to benefit from an as expected inflation release from the US and a not so strong housing market index by the National Home Builders Association that came out 2 points lower than expected.

It has been a quiet day on the forex market for the EUR/USD binary options forex pair. While the European morning market kicked off with a very tight range between 1.3600 and 1.3620 the pair has managed to test levels above 1.3640 reaching almost 1.3650 just after data was released at 13:30 GMT for m the US.

The consumer price index was benign still far away from the FED's target of 2% so there is no immediate danger in inflation pressures. The main component that has risen was fuel prices hence the reaction in the US dollar.

During the next couple of hours the Euro has given up all gains and managed to sink as low as 1.3583 before rebounding again to trade close to current levels at 1.3618. Now with the most of the trading session over the pair is consolidating further.

We have drawn some lines for support and resistance and will update this post should those are touched, however if there is no break of recent ranges we are very likely to test the upside again. We are buyers of call options at 1.3600, but if we see a sustained hourly close below 1.3580 we would reconsider our stature.

For now poor housing data should keep the euro buoyed against the US dollar, on the other hand important data tomorrow is mainly during the US session, so any drastic changes shouldn't happen to the rate in European trading. Happy trading and good luck!

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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