EUR/USD Chops – CPI to Break the Range?

Posted on 15. Apr, 2011 by in Forex Signals, How To, Random Noise

1.4500 has been broker a couple of times but further upside on the pair is yet to be seen. In recent days we have seen the pair range trading between 1.4520 and 1.4360. The pair has been fairly volatile yet without any kind of clear direction. The rate hike out of ECB was clearly priced in, as the announcement itself gave no further upside on EUR/USD. The press conference was, in my opinion, a mixed bag which was also reflected in the price action following the press conference. Now a couple of hours later EUR/USD started to break the highs and moved to the range it´s currently trading at, and has been here for a couple of days.

With the break of 1.4500 along with key levels of resistance, I would assume we are likely to see further upside on the pair (everything else being equal, that is). With that being said, after a thrust to the upside like this, a pullback seems natural but with recent price action I am having my doubts that will happen before the pair continues higher. Clearly we want to keep an eye on 1.4350 as we have had some strong bounces of this level.

The tipping point could be today´s core CPI out of US, which previously came out at 0.2 and is expected to come out at 0.2 today. If this number comes out worse than expected we are likely to see further upside on EUR/USD and I would expect that a deviation of -0.2 should be enough to make the pair rally out of the current range. Even with a small deviation we could be looking for further upside, as it currently seems like we just need some kind of small trigger to push the pair above recent highs. This is what I will be looking for. At a possible deviation to the upside, I would look for any kind of possible long trade on USD/JPY.

Related posts:

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  5. EUR/USD – Resilience Untill GDP?

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