EUR/USD decreasing during Asian session
Yesterday, the speculation of large investors played a greater role than fundamental data. As a result, the pair EUR/USD was able to reach the mark 1.1343.
However, it is worth to say some words about the positive economic data from the eurozone. In February, core inflation rate rose by 0.8% vs. forecast 0.7%. In January, the eurozone trade balance also rose.
The US balance of payments for the 4th quarter is really disappointing. The negative balance for the previous period (Q3) was revised from -125 billion to -130 billion, for the 4th quarter amounted to -125 billion vs. -117 billion.
As we predicted yesterday, when the big investors will complete the redemption, we can see the strengthening of the US dollar. Speculative phase lasts an average of 3-5 days. Now, two scenarios can be considered for the pair EUR/USD.
The first scenario is the consolidation of EUR/USD as we will not see the significant economic news the next week.
The second scenario is a reversal of the pair on a back of profit taking by big investors. However, we consider the first scenario and expect consolidation of the pair EUR/USD in the range of 1,1325 - 1,1385.
How to trade
We would buy CALL options if the pair is able to break up the level of 1.1320.
Target price: 1.1320
Expiry time: 21:00 GMT