Forex Technical Update
- The EUR/USD broke above the 1.43 level over the first Asian and European session to start this week.
- Going into the US session, the market was consolidation, but is now showing bullish continuation towards the 1.4370-1.44 resistance zone.
- The 1H chart shows the RSI pushing above 60, and a rejection earlier in the European session.
1.44 Resistance; 1.43 Support:
- There aren't any important risk events and fundamental releases this US session to propel the EUR/USD above the 1.44 level.
- It would be a range-bound expectation to see the market slide from the 1.44 resistance back towards the 1.43 area.
US Manufacturing, German GDP
- The Empire State Manufacturing Index came out -7.7% for July after a -6.1% in June. Economists' forecast averaged about 0.5% so this was very disappointing.
- This can be USD-negative specifically. It is not bringing a wave of risk aversion or anything, but it does put a dent in the prospect of economic recovery in the US.
- The thing is, the market is not necessarily trading these reports at the momentum. But the provide pivots in time for the market to continue or reverse its short-term course within the context of a medium term range-bound market.
- The next risk event could be the German GDP numbers that come out at the onset of the European session at 2:00AM EDT.
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Fan Yang CMT
Chief Technical Strategist