Sorry, you need to enable JavaScript to visit this website.

EUR/USD Forecast 23 Apr 2014

You are here

EUR/USD Chart 22 Apr 2014
5/5 of 1 ratings

The Euro is once again consolidating before its next move

We have become accustomed to some sort of lack of moving in the most popular pair of them all. It has been lacking direction for some time now, and today is no exception. The Euro can go either way now, however the next 24 hours are likely to lead to some result in terms of a breakout from recent ranges.

We will turn the attention of our readers to several key points in our analysis - while there hasn't been a big move for a while, this increases the possibility of one happening any day now. With the next ECB meeting approaching - we could see a fresh round of volatility in the upcoming sessions.

Today's trading started with a disappointing release of PMI data from France, which reiterated that that economy is not doing very well and the recovery is likely to be quite shallow. On the other hand, the German PMI's continued to eek out fresh gains with the services figures rising to 55.

The composite PMI for the Euro area has also been quite solid and market participants gladly accepted the possibility of an upbeat outlook coming forward. However the Euro did not manage to maintain its gains to the area just above 1.3850 and dropped substantially throughout late Europe and early US, to test in the end levels around 1.3812.

The US data has not been stellar, with Markit's manufacturing PMI coming short from expectations at 55.4 (which is only a tiny bit lower than last month's figures). Ne home sales have dropped abruptly in March to 0.384M, which is way lower than expected, however one month does not make a trend.

The charts look still a bit more supportive for the Euro than for the dollar, but nothing conclusive can be drawn. On the upside only a break above the 1.3855 area will result in a protracted move higher targeting 1.39 and above.

On the downside the strong support level is the area around 1.3790, we would be buying calls if we reach there, but would be quickly reversing our position with daily puts, if we see a sustained hourly break below that level. In any case, this move could happen either tonight or tomorrow, so keep a vigilant eye and happy trading!

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.

You may also read