Intraday eur usd analysis suggests there may be some upside strength in the pair on Monday, as a short-term range breakout drives the pair to carve out fresh 5-day highs.
From Friday support at 1.3705, the EURUSD traded range-bound throughout the Monday European session, between support at 1.3745 and resistance at 1.3766. The combination of a disappointing midday Chicago PMI data and a dovish tone in Yellen’s latest speaking engagement catalyzed a break through resistance during the early European afternoon, to new daily highs at 1.3805. A subsequent selloff dipped the pair to what is now range support at 1.3767, offering up today’s trading range of 1.3767-1.3801.
Price has just broken through resistance, and a close above this level would suggest further upside as the day matures. A quick eur usd analysis offers up an initial target of previous resistance at 1.3827. Beyond that, look for the pair to hit March 25 highs at 1.3843, and validate a medium term upside target at 1.3874.
If the recently broken resistance holds, and the candle fails to close outside of Tuesday’s range, it could be an indication of further consolidation in the EURUSD. Such a scenario would offer up an initial downside target of range support at 1.3767. A break, and close, below this level would validate 1.3736 as a potential target, with Monday lows at 1.3723 a medium term downside limit.
Stochastics are mid-range, having dipped from an overbought region as price reached range resistance mid European morning.
If the current break fails to hold, eur usd analysis suggests that any one of a host of key US data could initiate a break as the day matures. The two headline figures, ISM manufacturing employment and ISM manufacturing purchasing managers’ index (PMI) are forecast at 52.8 and 54.0 respectively, and a surprise in either could be the driver behind the medium term direction in the EURUSD.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com