It looks like a big movement on the EURUSD is about to happen really soon. Will today’s CPI data be a great trigger for that?.We’ll see. The reason we are looking forward for an increase in volatility is that the EURUSD is approaching the end of a rather boring sideways trend and traders need to eventually decide which way they want to go.
EUR/USD daily
The sideways trend on the EURUSD has lasted since the second half of November and is shaped like an ascending triangle with a horizontal resistance at 1.137 (orange) and the rising dynamic support (red). A breakout of one of those two should bring us a proper mid-term trading signal. A breakout to the upside should give us a buy signal and a breakout to the downside should give us a sell signal.
In case of a breakout to the upside, there’s one additional resistance that we should be aware of. This resistance is a long-term down trendline (blue), which connects lower highs since May 2021. Only a breakout of that resistance will bring us a legitimate and powerful buy signal on the EURUSD, just crossing the 1,137 level may not be so significant.The CPI data that we’ll find out really soon look like a potentially great fundamental trigger to start one of the movements described above. In this case, we don’t have to be so patient, the data will be published really soon.
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