After experiencing a rather volatile trading session yesterday, the EUR/USD is rising. Its new found strength can be attributed to the dollar coming under intense selling pressure particularly against the JPY. Additionally, a better than expected German Trade Balance report heavily contributed to the euro’s rise. This enabled it to hit its highest level in over a week. According to an official data release, Germany’s trade surplus widened to €20.6 billion as compared to €18.6 billion in September. Analysts and economists had expected the trade surplus to only widen to €19.2 billion. This was viewed by many as a huge relief, considering it was reported yesterday that manufacturing activity in the German economy had risen only by 0.2%.
Investors should closely monitor the upcoming release of various economic reports scheduled for the latter half of today’s trading session. Additionally traders should pay attention to other important reports that are scheduled throughout the duration of the week, which should provide some sort of insight into the growth trajectory of the U.S. economy, as declining global growth is becoming a huge concern.
When looking at the hourly chart for the EUR/USD, the currency pair seems to have entered a strong uptrend. Its momentum indicators along with its relative strength index are giving a clear buy signal, which implies a shift towards the buy side.
Long the EUR/USD at current levels for an intermediate target at $1.24151, with a strict stop-loss below $1.22605.