Euro’s consolidation continue amidst an absence of ground breaking news for either side. It may take something at the level of Thursday’s US Final GDP figures, consensus forecast at 1.4%, along with with a good read in the weekly claimant count to jogged things off the range play. Note that our bias is for an eventual bearish breakout as long as economic data from both sides suggest the possibility of a widening rate gap as the US economic remains strong enough for the Fed to keep inflation concerns at the top of their considerations while the ECB takes a drop in inflation pressures as an opportunity to shore up the regions diverse economies.
Resistance
- 1.07731 – 50D Moving Average
- 1.07458 – Intraday Consolidation High
- 1.07180 – Intraday Consolidation Resistance
Support
- 1.06718 – Intraday Consolidation Low
- 1.06494 – Low for May
- 1.06012 – Low for April
EURUSD’s consolidation from the past two week has formed into a triangle. That said the pattern of lower highs appear to be sharply lower than that of the higher lows. Among indicators we have the stochastic heading up though in the context of a consolidation this to us is just a suggestion for a test of resistance. Our overall bias for the pair is to eventually see a bearish breakout. Consider selling on long hourly wicks coming from the immediate resistance at 1.07180, or when seeing bearish engulfing candles coming out of the current hourly consolidation.
