For my trading style, I use price action, but mostly push towards fundamentals and sentiment. I am still on the side of the EUR/USD pushing lower, but price action is printing another picture. US inflation data came out lower (Core 6.3% actual/ 6.5% expected, Inflation Rate 7.7% actual/8% expected) which made traders/investors think there is likely going to be a FED pivot. Even if the FED pivots, with the issues still surround the EZ and the FED still wanting to increase rates to fight inflation, how long can the EUR/USD maintain its momentum higher? If traders and investors keep piling in and price breaks 1.05, if price is able to hold above the 1.05 until the end of November, it will mean that things have calmed a bit and price movements might be moving towards neutral. But there is still a lot of uncertainty in the air, sentiment is still in favor of the USD pushing higher, and a global recession might be around the corner. With the USD being a safe haven currency, I still think price will push higher. With the short term sentiment against the USD, there might be another push higher on the EUR/USD. The EZ GDP data will be coming out this week, along with the USD PPI which could put some pressure on the EUR/USD depending on what the data prints. I have a 90k short on this pair, so I'll see what happens. If needed, I am looking at getting into the AUD/USD if needed to hedge this pair.
Comment:
Price did push up higher and I did get into the AUD before the start of the new year, but exited out of it. I was thinking price was going to drop lower, because the difference from now then before is the news pushing out an aggressive FED. Previously, towards the end of last year, there was takes about the phase slowing down and being more dovish. But it isn't happening now. The ECB though, is being hawkish and there was more talks before on what the ECB would do. This upcoming ECB Rate Decision, it is almost certain that they will be raising rates by 0.50%, so this could push the EUR/USD pack to 1.07 or maybe a little higher. This is coupled with the FED raising rates by 0.25%. But if the FED raises rates by 0.50% and they come out extremely hawkish (if inflation data comes out higher), then price on the EUR/USD will likely break the 1.05 lvl.