EUR/USD are at it again

25 May, 2015

The Euro has been falling for almost a week now. The catalyst for the fall was Benoît Cœuré’s , (member of the Executive Board of the ECB) hints that the central bank may expand its stimulus package already next month.

The inflation rate has stabilized in the euro-zone and the economy is no longer moving towards deflation, however lets not keep our hopes up – a steady growth of inflationary expectations is needed, and not only from commodities.

There are rumors of default in Greece – lets wait and see if that turns out to be true or not. One thing is certain though – considering the weak macroeconomic calendar next week, traders will monitor the Greek comedy closely.

EUR/USD

The pair has breached the ascending channel, so at this point we may consider selling at the breached ascending trend, where we can also find the breached horizontal level 1.1100:

On the monthly chart we are closing in on the monthly engulfing pattern:

That is why the chart may bounce back at 1.0875 for a short term:

On the H4 chart we should consider buying:

On the H4 chart there is a breached figure, which looks like a widening pattern and an inverted flag. The price can potentially fall to 1.0650. Given the fundamental data at hand, this scenario is quite possible:


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