Two Trades To Watch: EUR/USD, Dax

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EUR / USD holds 1.18 ahead of EZ-IPK. U.S. retail sales and consumer sentiment.

EUR / USD holds itself slightly above 1.18 and is set for weekly losses of 0.5% this week amid mixed messages from the Fed. While Fed Chairman Jerome Powell insisted that the U.S. economic recovery is still a long way from where the Fed wants it to tighten policy – this is in stark contrast to the St. Louis Fed chairman, who insisted the Fed was in a situation where it could decrease.

This would be in contrast to the ECB, which has recently moved its target points to rain interest rates further out.

All eyes are now turned to a lot of data. Eurozone inflation is expected to confirm 1.9% YoY in June.

U.S. retail sales are expected to contact again, which could help support the pair. The confidence of an American consumer is also payable.

Where then for EUR / USD?

EUR / USD is trading below its 50 & 200-day ma and below its steep multi-week downtrend line. The downward slope appears to point towards a cross below the 200 dma in a bearish signal of a “death cross”.

The RSI sustains further losses while remaining outside oversold territory. A break below the recent three-month high of 1.1771 could confirm another leg lower to 1.1740 and the March 31 low of 1.17.

Any recovery would need to pick up the rising trend line at 1.1830 and yesterday’s high of 1.1850 to look at 1.1880 the July high.

71 7Dax tries a rebound

After falling 1% in the previous session, the Dax has found support and aims to push ahead. Although feeling is mixed. Rising greedy cases across the continent and further blockade in Asia could limit gains.

Inflation concerns also continue after high readings this week from the US, Germany and the UK. Eurozone inflation is expected to confirm a drop in pressure in June to 1.9% below the ECB’s 2%.

Where next for the Dax?

The Dax has strengthened over the past 3 weeks, surpassed by the all-time high of just over 15000 and on the lower band ahead of 15450.

Yesterday’s sale saw the Dax bear support at 15715 and moved below its 50 & 200-day ma before finding support at 15580.

The declining bearish forecast on the MACD offers hope for a higher move, however some rebound would need to pick up the 50 & 200 dma around 15650 to return to 15715.

Behind, a break through 15580 could see the Dax take another leg lower to 15450. A break through here could see sellers gain traction to 15280.72 4

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