The pair will likely continue pulling back as sellers target the key support at 1.0150.
Sell the EUR/USD pair and set a take-profit at 1.0175.Add a stop-loss at 1.0366.Timeline: 1-2 days.
Set a buy-stop at 1.0300 and a take-profit at 1.0400.Add a stop-loss at 1.0250.
The EUR/USD price pulled back to a low of 1.0254, ahead of the upcoming economic numbers from the United States and Europe. The price is about 1% below the highest level this month. The price is at the lowest level since August 10th.
US Retail Sales and EU GDP Data
The EUR/USD price rose sharply last week after the US published significantly lower consumer and producer inflation data. According to the Bureau of Labor Statistics (BLS), the headline consumer inflation dropped from 9.1% in June to 8.7% in July. That decline was slightly lower than what most analysts were expecting.
On the following day, the BLS showed that the country’s producer price index (PPI) dropped for the first time since early in the pandemic. It eased to 9.8% in July as the price of gasoline declined. The pair then started dropping as Fed officials like Mary Daly, Charles Evans, and Neel Kashkari insisted that the bank will continue hiking rates.
The EUR/USD pair will react to several important economic data this week. On Tuesday, the US will publish the latest building permits and housing starts numbers. Economists expect the data to show that building permits dropped from 1.696 million and 1.540 million, respectively.
These numbers will be followed by the latest estimate of European GDP numbers. Economists expect the data to show that the economy expanded by 0.7% on a quarter-on-quarter basis and by 4.0% on a YoY basis. With the bloc facing significant energy challenges, there is a likelihood that it will sink to a recession this year.
The pair will next react to the latest US retail sales and Fed minutes that are scheduled for Wednesday. The minutes will provide more details about what the Fed officials deliberated. The EUR/USD pair will react to the latest EU inflation data and the US existing home sales data.
The EUR/USD price rose to a high of 1.0366 last week. This was a notable level since it was the lowest level in May and June of this year. It has then pulled back slightly and moved slightly below the 25-day and 50-day moving averages. The current price is slightly above the ascending trendline shown in purple.
The pair will likely continue pulling back as sellers target the key support at 1.0150. More upside will only be confirmed if the pair moves above the resistance at 1.0366.
Ready to trade our free Forex signals? Here are the best Forex brokers to choose from.