The upcoming week could bring modest gains in the EURUSD on the back of increased expectations of a European Central Bank rate hike and a fairly positive technical outlook in the short term.
Resistance comes in at $1.3745 for the EURUSD, the Feb 9 high. A break of that level should bring the rally back though $1.3862, the Feb 2. peak. On the week, the euro rose 1.3 percent vs the dollar, rising after two straight weeks of losses.
Surprisingly the dollar, a traditional safe-haven along with the Swiss franc, failed to capitalize on heightened geopolitical tensions in the Middle East.
Trading Setups / Chart in Focus:
The inside bar setup which formed on the EURUSD daily chart on Tuesday of this week has given way to higher prices off the support near 1.3430 that it formed above, and price has risen to just below resistance near 1.3750.
If price can continue pushing higher in the upcoming week, we may see a retest of 1.3850 if 1.37850 fails to hold price at bay.
For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my price action trading website.
On Wall Street Friday stocks pushed higher despite growing signals of an over-extended rally.
The Dow added 73.11 points, or 0.59 percent, the S&P 500 gained 2.58 points, or 0.19 percent, the Nasdaq added 2.37 points, or 0.08 percent.
Upcoming important economic announcements: 2/21/2011
4:00am EST: Euro-Zone – German Ifo Business Climate
9:00pm EST: New Zealand – Inflation Expectations q/q