Bullish view
- Buy the EUR/USD and add a take-profit at 1.2180.
- Add a stop-loss at 1.2100.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 1.2120 and add a take-profit at 1.2050.
- Add a stop-loss at 1.2183.
The EUR/USD is holding steady as the market continues to focus on the recent economic data from the United States and Europe. The pair is trading at 1.2145, which is about 0.80% above Thursday’s low of 1.2052.
EU GDP data ahead
Last week, the EUR/USD pair was a bit volatile as the market reflected on the strong inflation data from the US. The data showed that consumer prices rose by 4.2% in April while the producer price index rose by 6.2% in the month. This growth was bigger than what most analysts were expecting. It even surprised some Fed officials, including Vice President, Richard Clarida, who believes that the figure was transitory.
This week, the pair will react to the latest Eurozone GDP data that will come out on Tuesday. Economists expect the numbers will show that the EU GDP declined by 0.6% in the first quarter, leading to a 1.8% year-on-year contraction. The number will come a few days after the European Commission increased its forecast for the bloc. It expects the economy to bounce back by 4.2% in 2020 and by 3.8% in 2022.
The EUR/USD pair will also react to the latest inflation data from the Eurozone that wll come out on Wednesday. Based on the estimate released two weeks ago, analysts expect the data to show that the headline CPI rose by 0.6% on a MoM basis and by 1.6% on a year-on-year basis. The core CPI is expected to have risen by 0.6% on a YoY basis.
The EUR/USD will be affected by the latest data from the United States like housing starts, building permits, and initial jobless claims numbers.
EUR/USD forecast
The four-hour chart shows that the EUR/USD pair has bounced back after falling to 1.1980 earlier this month. The price seems to be forming a flat-top pattern. It has also moved above the ascending channel that is shown in black. Further, the price is approaching the first support line of the Andrews Pitchfork tool. It has also risen above the 25-day and 15-day exponential moving averages, which means that bulls are in control.
Therefore, the pair will likely keep rising as bulls target last week’s high of 1.2181, which is about 0.35% above the current level. However, a drop below 1.2100 will invalidate this prediction.
