EUR/USD: bull hammer ahead of key event risks this week

EUR/USD: the quiet before the storm, awaiting key data and political events.
EUR/USD: daily sticks are leaning bullish, bull hammer formed.

Ross J Burland FXStreet

EUR/USD has been drifting sideways in a quiet start to what might turn into a storm on the back of economic and geopolitical events taking place. Meanwhile, the single unit is currently trading at 1.2272 with a high of 1.2279 and a low of 1.2265.

USD was lower on Friday after the non-farm payrolls miss, despite slightly improved wages. The previous two months were revised net -50k, and the Fed expectations were dampened by the report. Powell was sticking to his rate path guns though and wasn't prepared to speculate in regards to potential headwinds from trade war risks, pooer equities and high volatility.

Trade wars are the dominant force - Westpac

With a focus back to data, the German Retail Sales poor outcome and IP miss were not helpful in the case of the bulls and eyes will now turn to German Feb trade balance and EZ April Sentix index early this week. We also have US CPI and FOMC minutes, Summit of the Americas and the Boao Forum as further key risk events, the latter coming up tomorrow and will be monitored after risk soured on Friday when Mnuchin said there is the potential of a trade war with China leaving EUR/USD closing near 1.2290 for the week.

EUR/USD levels

Technical indicators lean bullish with the pair up after a new low was set and RSI diverging on new low with a bull hammer formed. Valeria Bednarik, chief analyst at FXStreet explained shorter term, and according to the 4 hours chart, the pair presents a neutral stance:

"It settled above a now flat 20 SMA, while technical indicators are stuck around their mid-lines. Steady gains beyond 1.2300 could favor an extension up to 1.2370, while below 1.2250, the pair will likely extend its slide below the 1.2210 region."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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