It’s all about politics! Trader’s most preferable pair is facing another front wind for the past 2 weeks. A German political conflict or better say an intra-governmental disagreement between Angela Merkel and her Interior Minister, resulted to his resignation as interior minister over the weekend. The last 2 weeks of drama between the 2 sister parties CSU and CDU was the main reason of keeping the EURUSD flirting with its very strong support of 1.1500, even though the pair managed to reject breaking below this support it also did not manage to break above a newly formed resistance of 1.1722. In the next few sessions traders must focus on 2 major events: Today, Thursday, FOMC and on Friday, nonfarm payrolls. The first is unlikely to provide any significant volatility although cautious must be in place as traders may start prepositioning ahead of both events and the pair may retest once again the 1.1500. A no hawkish FOMC and relatively week nonfarm payroll number will be exactly what is need to fuel a new rally in the pair. Breaking above 1.1722 will extend to 1.1838 and 1.1957
Technically the pair is neutral. Our traders still keep open positions at 1.1735 and targeting profits at 1.1838 and second position open at 1.1650 targeting profit at 1.1838 with trailing stops above 1.1722.
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