Preferred Strategy: EurUsd is steady ahead of today’s release of the US inflation figures after having tested the neckline of the head/shoulder by reaching 1.1879. A soft inflation reading today would see the dollar come under pressure and would then take out the stops above the neckline and would see the Euro head towards 1.1900/1.2000. A strong number would underpin the dollar and send the Euro lower, potentially setting up an eventual H/S objective of around 1.1550 or an even bigger head shoulder target of 1.1235. Don’t get excited! This is a very long way off.. Overall, another range trade may be the plan for Friday ahead of the US data (1.1800/1.1.1870), beyond which just go with the flow.
|24 Hour: Neutral||Medium Term: Mildly Bearish – Prefer to sell rallies|
|1.1930||(61.8% of 1.2092/1.1669)||1.1826||Session low|
|1.1920||Descending trend resistance||1.1795||11 Oct low|
|1.1879/82||Session high/(50% of 1.2092/1.1669)||1.1725||Minor|
Economic data highlights will include:
German CPI/HICP, US Retail Sales, CPI, Michigan Consumer Sentiment Index, Business Inventories, Baker Hughes Oil Rig Count.
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