EURUSD: Prefer to sell rallies

Jim Langlands FX Charts

EUR/USD: 1.0560

EurUsd had a choppy day on Friday, heading up to 1.0618 when the dollar took on a soft tone before turning sharply lower in US trade, to finish at 1.0560, not too far removed from where it had begun the day.

This leaves the outlook pretty much unchanged, and with the short term momentum indicators being pretty neutral a nimble stance is required although the dailies still suggest another test of the downside in the days ahead. If so, near term support will arrive at the 23 Feb, 1.0637 low, and then again as we approach 1.0500 and the 1.0493, 22 Feb low. Below that, there is not too much support ahead of the 11 January low of 1.0453, 1.0420 and to levels below 1.0400 where there is little to support the Euro until the 3 Jan low of 1.0340 A return to the topside will once again find offers at 1.0600/20 above which would head towards 1.0635 and possibly to 1.0675/80. Above here looks unlikely today, but we could potentially see a move back to 1.0700 and above. The Durable Goods Orders will provide much of the direction today but until then, I prefer to look to sell into strength, looking for an eventual retest of 1.0500.

24 Hour: Prefer to sell rallies		Medium Term: Mildly bearish
Resistance		Support
1.0700	22 Feb high	1.0556	Friday low
1.0678	16 Feb high	1.0537	23 Feb low
1.0635	(76.4% of 1.0678/1.0493)	1.0520	Minor
1.0618	Friday high	1.0493	22 Feb low
1.0590	200 HMA	1.0453	11 Jan low

Economic data highlights will include:

M: EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, US Durable Goods Orders, Pending Home Sales, Dallas Fed Mfg Business Climate

T: German Retail Sales (Jan), US Provisional GDP (Q4), Wholesale Inventories, Provisional US Personal Consumption/Expenditure, Goods Trade Balance, Case Shiller House Price Index, Chicago Purchasing Managers Index, Consumer Confidence, Richmond Fed Mfg Index, API Weekly Crude Oil Stock Inventory. Trump speaking to Congress.

W: EU Mfg PMIs, German CPI, US Personal Consumption/Expenditure Index, Markit Mfg PMI, ISM Mfg PMI/Prices Paid , Construction Spending, Total Vehicle Sales, EIA Crude Oil Stocks Weekly Change, Fed’s Kaplan/Brainard Speeches

T: German Import/Export Index, EU Unemployment CPI, PPI, US Jobless Claims, ISM NY Index

F: EU Services/Composite PMIs, EU Retail Sales, Fed Speeches: Yellen, Evans, Lacker, Powell, Fischer

Author

Jim Langlands

FX Charts

Jim Langlands began his trading career in the commodities markets in London in 1976, before moving to Australia in 1979 to work as a floor trader on the Sydney Futures Exchange.

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