EURUSD
The EUR to USD (EURUSD) price is little changed today as the market digests the weaker economic data from the EU and the United States. Traders are also focused on today’s virtual meeting on EU’s €1.8 trillion seven-year budget and the €750 billion recovery fund.
EU members will hold another meeting today as the leaders attempt to pass the region’s budget. Earlier attempts failed this week after Hungary and Poland decided to vote against it. Slovenia is also said to join the opposing side.
At the core of the dispute is the fact that the EU has proposed tying funding to democratic norms and migration issues. The opposing side term those clauses as blackmail.
In addition to the drama in Europe, traders will be listening to clues by Christine Lagarde, who will deliver a speech. But, don’t expect anything new. Furthermore, she has talked several times this month. The EURUSD will also react to US jobless claims and existing home sales data.
On the 30-minute chart, we see that the EUR to USD price managed to break a key support yesterday when it moved below the ascending trendline. This performance was partly because the pair was also forming a head and shoulders pattern.
Therefore, while the pair has already turned bearish, I expect that bulls will attempt to return today – they have already started – and push the price to the ascending line at ~1.1865. I also suspect that the pair will then resume the downward trend in line with the H&S pattern.
Looking at the four-hour chart, we see that the EURUSD formed a double top pattern at the 1.1891 level this week. Also, like on the 30-minute chart, the pair also managed to move below the ascending trendline. Therefore, for today, the key level to watch will be yesterday’s low of 1.1831. A move below this price will open opportunities falling to the next support at 1.1800.
