EURUSD – From the memorable nearly 300 pips candlestick from June 14 this year. (caused by no changes in ECB policy), the pair moves in consolidation with smaller and smaller daily ranges, resulting that the quotations are trapped in a triangle whose upper (resistance) and lower (support) arm is very carefully respected by the market.
Currently, the quotations are approaching the upper limitations of formation and it seems that this time it may be defeated. A strong impulse will be needed, perhaps Tuesday’s data on economic growth and inflation in the EU or Wednesday’s decision on the level of FED interest rates. Especially the second event, if the interest rates are left unchanged, it may surprise the dollar bulls negatively and give a strong growth impulse to the pair by weakening the USD.
In the event of a successful break, the target will be 1.18. After a possible test of the defeated resistance, which will now support the pair’s quotations, the continuation of increases may reach the level of 1.1850, where the maximum of the 300-day candle mentioned at the beginning is placed. Each break from the consolidation acts like a released spring … so we can count on a longer period of increases … or decreases in the case of bottoming which I think is less likely. My assumptions are not supported this time by any of the strategies I use, I rely more on the upcoming macroeconomic events and lower tensions in relations between the EU and the US after Trump-Juncker meeting on the subject of tariffs, which should rather affect positively the EURO.