- Fundamental Analysis:
Next week could be a quiet week for FX market. There are less economic data released and hesitative psychology of investors could contribute to low volatility for FX market.
I recap what happened last week.
Regarding US economy, FED president Janet Yellen had the first testimony in front of Senate and House about monetary policy. The main point was FED keep unchanged current monetary policies, and believe in the long term recovery pace of US economy. Besides Yellen Testimony, Retail Sales of US dropped to -0.4%. Negative labour market, declining in Durable Goods Orders, and now falling down of Retail Sales in the third months contributed to the weakness of US Dollar last two weeks. There seems the recovery pace of US economy is halt despite of reassuring of FED Chairman Janet Yellen about prospect of US economy.
Regarding EZ economy, the main point was surprised GDP data. EZ GDP grows 0.5% in Q4 after 17 months having negative data. EZ economy begins recovery period, policies of ECB seem beginning to have effect on the entire EZ economy.
The divergence between US economy and EZ economy could help to figure out the move of EURUSD next week, but everything is not easy. We need to consider many factors before trading.
This week, traders should pay attention in following data:
- Germany ZEW Survey on Tuesday. I believe in positive data.
- FOMC Minutes on Wednesday. I think there is nothing new in this Minutes, most likely FED would provide forward guidance, but I think they would not hurry.
- US CPI on Thursday. I think US CPI would be unchanged.
Hence, In my opinion, economic data this week is not strong enough to drive EURUSD, not enough dynamic or energy.
When Fundamental elements couldn’t provide enough fuel to drive the move of price, there are three possibilities:
- Firstly, trade base on what happened last week.
- Secondly, Wait and observe no trade.
- Thirdly, Trade using Technical Analysis.
Basing on what happened last week, the divergence between US and EZ, the mood is BUY EURUSD, but traders must be cautious unpredictable incidents.
- Technical Analysis:
Last Friday, despite of good GDP data, EURUSD couldn’t move above 1.37 key resistance level. The price broke 1.37 and then bounced back below 1.37, shaped a shooting star. This is a SELL signal, but not a strong SELL signal. However, I see price moved above bearish trend line I show on the chart. This could be a BUY signal.
I checked many indicators and different technical analysis methods but there is no valuable information. It’s difficult to trade when both TA and FA don’t provide any signal. Trading in this condition is RISK, high Risk, but high risk, high gain.
In my opinion, I choose BUY option. BUY or SELL depends on your Risk Appetite.
The target: 1.38 level.
Stop Loss: 23.6% Fib retracement at 1.3565.
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Next week could be a quiet week for FX market. There are less economic data released and hesitative psychology of investors could contribute to low volatility for FX market.
I recap what happened last week.
Regarding US economy, FED president Janet Yellen had the first testimony in front of Senate and House about monetary policy. The main point was FED keep unchanged current monetary policies, and believe in the long term recovery pace of US economy. Besides Yellen Testimony, Retail Sales of US dropped to -0.4%. Negative labour market, declining in Durable Goods Orders, and now falling down of Retail Sales in the third months contributed to the weakness of US Dollar last two weeks. There seems the recovery pace of US economy is halt despite of reassuring of FED Chairman Janet Yellen about prospect of US economy.
Regarding EZ economy, the main point was surprised GDP data. EZ GDP grows 0.5% in Q4 after 17 months having negative data. EZ economy begins recovery period, policies of ECB seem beginning to have effect on the entire EZ economy.
The divergence between US economy and EZ economy could help to figure out the move of EURUSD next week, but everything is not easy. We need to consider many factors before trading.
This week, traders should pay attention in following data:
- Germany ZEW Survey on Tuesday. I believe in positive data.
- FOMC Minutes on Wednesday. I think there is nothing new in this Minutes, most likely FED would provide forward guidance, but I think they would not hurry.
- US CPI on Thursday. I think US CPI would be unchanged.
Hence, In my opinion, economic data this week is not strong enough to drive EURUSD, not enough dynamic or energy.
When Fundamental elements couldn’t provide enough fuel to drive the move of price, there are three possibilities:
- Firstly, trade base on what happened last week.
- Secondly, Wait and observe no trade.
- Thirdly, Trade using Technical Analysis.
Basing on what happened last week, the divergence between US and EZ, the mood is BUY EURUSD, but traders must be cautious unpredictable incidents.
- Technical Analysis:
Last Friday, despite of good GDP data, EURUSD couldn’t move above 1.37 key resistance level. The price broke 1.37 and then bounced back below 1.37, shaped a shooting star. This is a SELL signal, but not a strong SELL signal. However, I see price moved above bearish trend line I show on the chart. This could be a BUY signal.
I checked many indicators and different technical analysis methods but there is no valuable information. It’s difficult to trade when both TA and FA don’t provide any signal. Trading in this condition is RISK, high Risk, but high risk, high gain.
In my opinion, I choose BUY option. BUY or SELL depends on your Risk Appetite.
The target: 1.38 level.
Stop Loss: 23.6% Fib retracement at 1.3565.
If you like my analysis, please visit my site: www.sforex-solution.com/index.html
And like my FB page: www.facebook.com/sforexsingals
Following me on Twitter: twitter.com/SforexSolution