EUR/USD Forex Technical Analysis – Trade Through 1.0122 Changes Minor Trend to Up

The Euro is trading lower on Friday as U.S. Dollar investors assessed how high the Federal Reserve is likely to boost interest rates when policymakers meet on July 26-27. The uncertainty over whether the Fed will raise rates by 75- or 100-basis points encouraged investors to book profits ahead of the weekend, giving the single-currency a lift.

At 14:01 GMT, the EUR/USD is trading 1.0064, up 0.0043 or +0.43%. The Invesco CurrencyShares Euro Trust ETF (ETF) is at $92.93, up $0.33 or +0.36%.

Euro traders face two major catalysts next week, with the European Central Bank expected to hike rates by 25 basis points for the first time since 2011 when it meets on July 21.

Investors will also be focused on whether the critical Nord Stream 1 gas pipeline to Germany from Russia will reopen, after closing for maintenance this week. It is planned to reopen on July 21, but European governments are worried that Moscow could extend that in order to restrict European gas supply, disrupting plans to build up storage for winter, according to Reuters.

In other news, traders showed little reaction to a better-than-expected U.S. Retail Sales report. They believe retail sales were up because investors were paying inflated prices.

Short-Term Outlook

Trader reaction to the minor pivot at 1.0037 is likely to determine the direction of the EUR/USD into the close on Friday.

Bullish Scenario

A sustained move over 1.0037 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the minor top at 1.0122.

Taking out 1.0122 will change the minor trend to up. This will shift momentum to the upside. If the buying continues to strengthen then look for the rally to possibly extend over the near-term into the next minor pivot at 1.0284.

Bearish Scenario

A sustained move under 1.0037 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into the minor bottom at .9952. A trade through this level will indicate the selling pressure is getting stronger with the December 2, 2002 main bottom at .9860 the next likely target.