The EURUSD bulls have started the week on a front foot after the announcement that the White House and the Republican representatives had reached a debt ceiling agreement, averting a potential default that would have reverberated throughout the global markets.
The Fiber is 0.2% higher on Monday as the bulls look to add to the Friday session’s gains. However, with a busy week ahead for both economies, including Eurozone and US manufacturing PMIs, Eurozone unemployment and inflation data, and the US NFP and Unemployment data, the bears could be hoping to get a chance to dictate the direction of the cross in the near future.
The 4H chart shows that the cross has formed a descending channel trading pattern following the bulls’ failure to break above the major resistance level (solid green line) at 1.10950 at the beginning of this month. The Fiber has also firmly established a major support level (solid red line) at the 15th of March 2023 low of 1.05161.
With the price action trading around the golden ratio and the channel’s resistance, the Fiber rate would need to sustain a break above the resistance level to target the 1.07613 resistance level. The breakthrough of the 1.07613 resistance level could signal the presence of bullish sentiment and would bring the 1.07997 into play. However, the failure to sustain a break above the golden ratio would firmly leave the 1.07076 support level in play. Should the economic data and central bank chatter induce a sell-off, the Fibre will likely retest the 1.06679 support level lower.
The EURUSD currency pair faces a packed schedule for the week ahead, where the risk-on sentiment related to the US debt ceiling deal, economic reports, and central bank commentary becomes crucial in providing necessary support to either the bullish or bearish market participants and for a sustained run in either direction. Therefore, it would benefit traders to keep a keen eye on the developments during the week.
Sources: TradingView, Bloomberg, Reuters.
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