The EURUSD currency pair closed off the prior week uneventfully after trading sideways for most of the period, with a minor blip taking it into the red. The week ahead has CPI data coming out of Europe’s biggest economy, Germany, while the PCE Index is set to be released in the world’s biggest economy, the U.S.

Traders are wagering an 85% chance of the Federal Reserve hiking rates by 25 basis points, while expectations lean towards a similar hike by the European Central Bank, if not hiked by twice the amount. The Germany Ifo Business Climate came in slightly lower than expected, reflecting a decline in confidence in the economic outlook for Germany, something that could weigh on the Euro.

Technical

The EURUSD currency pair has traded higher with the pair well-above the 100-day moving average and within an ascending channel pattern. Support and resistance were printed at the 1.08330 and 1.10724 levels, respectively.

An ascending triangle pattern formed in the prior week as price action consolidated to trade in a tighter range, with bulls and bears battling for direction. A breakout to either side of the pattern on high volumes will likely drive the price further in the direction of the breakout.

The 1.10724 level will probably be a bullish target, while the 1.08330 level could interest bears if the market fails to hold the 61.80% Fibonacci Retracement Golden Ratio as an intermediate support.

Summary

From a technical standpoint, price action will likely break out of the ascending triangle pattern and move away from the pattern, with the 1.08330 and 1.10724 levels marked out as potential significance levels, depending on the breakout direction. Fundamentally, traders will look to the economic data for the week to participate in a move with market volatility likely to pick up steam to support the breakout direction.

Sources: Reuters, TradingView