- A battle between bears and bulls at 1.0600.
- Price may consolidate as it did on Friday.
- German data is expected to make the pair volatile.
The EUR/USD price closed on Friday with a small-bodied bearish candle showing that the price was consolidating. Traders are waiting for something fundamentally significant to encourage more buyers to place long positions at the current price. If there aren’t enough buyers, the bears are on the other side, waiting to push prices lower.
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The ECB is looking ready to join other central banks in raising interest rates, giving hope to the bulls waiting silently on the sidelines. We saw a lot more bullish momentum in the last week than we have seen. Tuesday and Thursday were excellent days for buyers as prices closed on large bullish candles.
Could this be the clouds before the rain? Are bulls getting ready to take over the market? If we can see some of that bullish momentum later today, it will be another sign in favor of a new uptrend. There isn’t much news expected by investors today, and it could see EUR/USD consolidating again as it did on Friday.
However, it might still be too early to say bulls will win this battle. Patience is a virtue, and we can wait longer to see the clear winner.
EUR/USD key events today
The most important thing investors will be looking out for today is the German Ifo Business Climate index. It measures investors’ sentiment toward the business climate and expectations for the coming six months.
The index has been on a downtrend for the past few months showing slowed growth in the economy. This month is no different. Investors expect the value to be lower than the previous 91.8 at 91.4. Anything lower could push EUR/USD prices down, while anything higher than expected could see the pair breaking the 1.06 level. The pair will consolidate if the value comes in as expected.
EUR/USD price technical forecast: Bulls retest the 1.0600 level
Monday morning charts show the bulls are trying to break above the 1.06 level where they got resistance on Friday. With the RSI bullish divergence in mind, we will wait to see if bulls can follow through and start a new trend.
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Prices are trading above the 30-SMA, showing bullish momentum. The only thing left for bulls to take over this market is a clean break of the 1.0600 level and RSI to start hitting above 70. If we can see this today, it will be the start of an uptrend. There is also the chance that this fails to happen, and prices go back below 1.0500 to retest previous lows.
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Saqib Iqbal
