EUR/USD Forex Signal: Break And Retest Pattern Is Forming

(MENAFN- Daily Forex) Forex Brokers We Recommend in Your Region See full brokers list 1 Read full review Get Started
Bullish view

  • Set a buy-limit trade at 1.1017 and a take-profit at 1.1135.
  • Add a stop-loss at 1.0950.
  • Timeline: 1-2 days.
Bearish view
  • Set a sell-stop at 1.1015 and a take-profit at 1.0950.
  • Add a stop-loss at 1.1100.

The EUR/USD price pulled back at the start of the new year as traders started coming back to the market after the Christmas holiday. The pair pulled back to a low of 1.1037, its lowest point since Thursday. It has retreated from last week's high of 1138 jobs and European inflation data ahead

The EUR/USD price has pulled back as traders continue watching the ongoing geopolitical risks around the world. One of the biggest risks in the market is in the Middle East, where Houthi rebels have continued attacking ships in the region.

They attacked several ships during the weekend, raising the possibility of higher oil and gas prices in the first quarter. The price of Brent has risen to over $77 while the West Texas Intermediate (WTI) rose to $71.30. Natural gas prices have also risen a bit.

The other risk is on China's and Taiwan issues. This week China's president, Xi Jinping vowed to go on with the reunification with Taiwan. It is unclear when this invasion will happen.

This statement came on the same day that China published weak economic numbers. According to the statistics agency, the manufacturing PMI retreated from 49.4 in November to 49.0 in December. Similarly, the non-manufacturing figure retreated to 50.4, lower than the median estimate of 50.5.

Looking ahead, the next key data to watch will be the manufacturing PMI figures from Europe and the United States. Economists expect the data to show that the bloc's manufacturing PMI remained at 44.2 in December.

In the US, economists see the report showing that the manufacturing PMI retreated to 48.2 in December. These numbers mean that the global manufacturing sector is not doing well as demand remains low/USD technical analysis

The EUR/USD exchange rate continued retreating on Tuesday after peaking at 1.1138 last week. It is approaching the important support at 1.1017, its highest swing on November 29th. The pair remains above the 50-period moving average while the RSI and the MACD have pointed downwards.

Therefore, the pair will likely retest the support at 1.1017 and then resume the uptrend. This is known as a break and retest pattern, which is a sign of a continuation. If this happens, the key price to watch will be at 1.1135.

Ready to trade our free Forex signals ? Here are the best Forex brokers to choose from.


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.