The near-term bearish trend may provide opportunities to fade into as it eyes up the 96.50 lows.
We could be off to a quiet start to the week due to a quiet FX calendar and whilst IMF wrap up their 3-day meetings. Therefore it may take a little longer for this trade to play out but we can at least use the key levels to seek suitable setups as the session/s unfold.
With Greece back in the headlines and Eurozone data expected to help support EURUSD this week then if negotiations with Greece are to go well we can expect a decent upside move on EURUSD. Conversely if Greece continue to put uncertainty on the markets then EURUSD could return to the downside. There is a valid argument here as the price advance from the 1.050 lows appears to be corrective.
The USD Index H4 trend is bearish but within a larger sideways movement. The weekly low of 97.15 was promptly followed by a Bullish Engulfing candle to stop the decline within it’s’ tracks but we now remain trapped below the 98. Handle. Due to the near-term bearish trend then I favour an eventual move below 97.15 to test 97 and 96.50 but we may see an initial upwards spike first.
There is a decent range between 98.00-22 comprising of the Weekly and Monthly Pivot which could be considered as a zone to fade (sell into). A break below 97.15 is required to open up a run down towards 96.50 lows. We are likely to see a price reaction near here due to profit taking and early-bird bulls where we can reassess the price action to consider the next move.