1.17 is a key horizontal level to look out for in E/U. We can see in the past 3 years that price has always either fell way below or pushed way higher once price has made a breakthrough from this level. Price is back at this level, and therefore we could expect a big push or pull to either direction over the next upcoming months.
Price is currently sitting at this key horizontal 1.17 level where we can see in the past has been seen as great support, price has been bouncing off this level, and heading higher. Price did recently reverse off this level but has made a retracement back down again - usually a sign of failed support.
There is a descending channel formed in the short-term, and price is currently at the bottom of the channel. We did see price bounce off a couple days ago, but price has since retraced the full move and is just above 1.17. Most traders are likely waiting on price to show further rejections and look to continue the trend, however I believe it's possible we will see price head lower, as we've just had a failed breakthrough attempt.
Looking at retail sentiment, as expected most traders are actually long on E/U and expecting price to push higher from here. We know most retailers are losers and therefore financial institutions are likely to be playing with their positions, and will likely push price lower to take out their trades.
Over the next week, we've got a few news events coming out for both the EUR and USD, some notable ones being USD's unemployment claims and PMI numbers for the Euro next week.
Macroeconomic data for the USD continues to disappoint, yet it's still strengthening against major currencies. After Tuesday's USD Retail Sales event, E/U still declined to the 1.17 level. This illogical behaviour of the greenback is explained by the growth of anti-risk sentiment in the market, and the dollar is the beneficiary of the current situation, despite some problems.
Data on the growth of US inflation was published on Sunday which also did not impress investors. The consumer price index has slowed down its growth, which has been observed over the past four months. The focus is on the tapering debate and whatever clues policymakers would provide on the timing for a tighter monetary policy.
Beyond this, there is an overall concern that the Delta variant will continue to cause major issues, as the world is seeing an increase in that infection rate, which has people worried about whether or not the economy is going to pick up locally as well as globally.
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