DERBYSHIRE GB / 2023, September 3rd, 2023 - Trade plan to sell rallies.
EUR/USD Trade Plan
The EUR/USD could see some bearish momentum in the coming weeks. Early forecasts suggest that US inflation may have become entrenched with an increase from 3.2% to 3.4% during August, requiring the Fed to keep interest rates higher for longer therefore strengthening the dollar and applying downward pressure on the EUR/USD.
However, before the CPI report and its potentially bearish effects on the EUR/USD, there could be some bullish momentum from events this week. On Wednesday, the US Balance of Trade and ISM Services PMI are both expected to show declines, signalling a slowdown in the US economy. This is likely to lead to sentiment strengthening against US interest rates being higher for longer which in turn would weaken the dollar and support the EUR/USD to the upside.
This potential for volatility presents the case for a sell trade on the EUR/USD to be executed when it rallies.
The EUR/USD is currently trading in the $1.07 area and has strong bearish momentum due to recently falling below its 200 day moving average.
Gavin Pearson
Retail trader since 2008
Specialises in forex G7 currencies
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