Bullish View
- Set a buy-stop at 1.1895 and a take-profit at 1.2050.
- Add a stop-loss at 1.1800.
- Timeline: 1-2 days.
Bearish View
- Set a sell-stop at 1.1847 and a take-profit at 1.1750.
- Add a stop-loss at 1.1950.
The EUR/USD price retreated slightly ahead of a relatively busy week where the US and the Eurozone will publish important economic data. It is trading at 1.1872, which is a few pips below its highest level last week.
Inflation and Retail Sales Ahead
The economic calendar will be relatively muted today with no major economic data expected from the US and the Eurozone. As such, traders will be focusing on the economic data that will come later this week.
On Tuesday, the US will publish the latest consumer inflation data. Economics polled by Bloomberg expect the data to show that the headline CPI declined from 5.0% in May to 4.9% in June. At the same time, they expect that the core CPI rose from 3.8% to 4.0%.
These numbers will provide more details on the state of the American economy. They will also provide signals on what the Federal Reserve will say in its upcoming meeting. In its past meeting, the bank decided to leave interest rates unchanged but members started deliberating on tapering of asset purchases. Higher inflation will help fuel this debate.
The US will also release the latest import and export prices on Thursday and the latest Philadelphia and New York Fed Manufacturing Index. The two numbers are expected to rise modestly as the US economy rebounded. Finally, the US will release the latest retail sales on Friday.
The EUR/USD will also react to the latest inflation numbers from countries like Germany and France and the latest Eurozone industrial production data. These numbers will come a week after the European Central Bank (ECB) unveiled its new strategy. The bank set its inflation target at 2.0% and hinted that it will be comfortable if it moved slightly above that level.
EUR/USD Technical Analysis
The EUR/USD pair is trading at 1.1872, which is about 0.80% above the lowest level last week. On the four-hour chart, the pair has moved above the 25-day and 15-day exponential moving averages (EMA). It has also moved above the important resistance level at 1.1847. Further, it has formed a small inverse head and shoulders pattern, which is usually a bullish sign.
Therefore, the pair will likely maintain the bullish trend as traders wait for the latest US inflation and retail sales data. The bullish trend will be confirmed when the pair moves above the important resistance at 1.1895, which was the highest level on July 6.
