Bullish View
- Buy the EUR/USD pair and set a take-profit at 1.1450.
- Add a stop-loss at 1.1300.
- Timeline: 1-2 days.
Bearish View
- Set a sell-stop at 1.1350 and a take-profit at 1.1300.
- Add a stop-loss at 1.1400.
The EUR/USD pair tilted upwards as investors embraced the risk-off sentiment again on Ukraine. It also rose slightly as investors reacted to the latest US retail sales data and FOMC minutes and the Eurozone industrial production data.
FOMC Minutes
On Wednesday, the US published the latest retail sales data that sent a picture that the economy is strengthening. The data revealed that the country’s retail sales rose by 3.8% in January while core sales rose by 3.3%. These numbers were better than the median estimates of 2.0% and 0.8%, respectively.
The strong retail sales data showed that American consumer remains strong even as consumer inflation has soared to the highest level in more than 4 decades. These are important numbers because the retail sector is the biggest employer. The sector is also a good measure of consumer spending data.
Further data revealed that the US export and import price index rose to 2.9% and 2.0%, which were better than the median estimates at 1.3%.
The EUR/USD pair also rose after the strong Eurozone industrial production data. Numbers by Eurostat showed that output increased by 1.2% in December helped by the auto industry. Production of automobiles rose by 17.7% in December, the fourth straight gain. They imply that production has moved above the post-pandemic level.
Later on, the Fed published minutes of the past meeting. The bank’s officials noted that the economy was doing well but they remained concerned about inflation. Therefore, like in the previous meeting, the officials hinted at more tightening.
The pair will react to the latest developments by Russia on Ukraine. In a statement yesterday, NATO warned that Russia was continuing its military build-up near Ukraine. The pair will also react to the latest US housing starts and building permits data.
EUR/USD Forecast
The EUR/USD pair rose to a high of 1.1380, which is about 90 basis points above the lowest level this month. The pair seems like it has formed a cup and handle pattern, which is usually a sign of bullish continuation.
It managed to move above the 25-day moving average while the MACD has formed a bullish crossover pattern.
Therefore, the pair will likely keep rising as bulls target the next key resistance level at 1.1450. A move above this resistance will see bulls target the highest point this week.
