The EUR/USD currency pair is currently facing a critical level around 1.0900 as it braces for a series of important economic releases and central bank decisions. The stalemate is partially attributed to the market’s anticipation of central bank actions and economic data that could influence the pair’s movement.
The European Central Bank (ECB) is set to release the Bank Lending Survey and January’s preliminary Consumer Confidence report, scheduled for Tuesday. Subsequently, Wednesday will mark the unveiling of the euro area Purchasing Managers Index (PMI) figures, which are expected to provide insights into the region’s economic health. Furthermore, attention will be focused on the ECB’s rate call on Thursday.
Amid these events, the technical chart for EUR/USD has turned more bearish, casting shadows on the earlier bullish trend triggered by a breakout above $1.1000. The failure of the signal on January 15th indicates that insufficient bullish price action was observed when the support level at $1.0936 was initially reached on that day.
Traders are advised to initiate trades before 5 pm London time to capitalize on potential market movements resulting from these fundamental releases and central bank decisions. It is emphasized that identifying a classic “price action reversal” is crucial, with a particular focus on hourly candles closing with specific formations such as pin bars, dojis, outside candles, or engulfing candles with a higher close. These levels or zones can be effectively utilized by closely monitoring the price action.
Overall, with the EUR/USD at a critical juncture, the upcoming economic data releases, including the Bank Lending Survey, Consumer Confidence report, and PMI figures, along with the ECB’s rate call, are expected to be pivotal in determining the short-term trajectory of the currency pair. Traders and investors alike are advised to keep a close watch on these developments as they are likely to have a significant impact on the currency market.
