Ahead of today’s European session, the euro is continuing on its upwards trajectory against the US dollar. At the time of writing, the EURUSD pair is trading at the 1.2547 mark. This marks a rise of 0.9 cents for the euro against the dollar over the last 24 hours.
In my opinion, the EURUSD pair’s rise has been caused by two major factors. First of all, it’s likely that the Eurozone’s economy will grow by 2% or more in 2018. Secondly, the US economy is unlikely to grow by more than 2%. Given this divergence in potential for economic growth, the euro seems to be on a stable upwards trajectory against the dollar.
Today, I’d advise paying attention to the data releases on the US housing market for January (new housing starts and building permits), which will be published at 16:30 (GMT 3). However, in my view, this is not a trendsetting indicator, although it has the potential to create some short-term volatility on the dollar.
Yesterday, the EURUSD successfully tested the double top level (1.2480 – 1.2520), which formed on the hourly timeframe at the beginning of February:
Considering that there aren’t any major events on the Forex calendar today, and there aren’t any particularly important statistics on the Eurozone or USA set to be published, it’s my view that, so long as nothing out of the ordinary happens, trading on the EURUSD pair will close somewhere around its current level, i.e. somewhere around the double top levels between 1.2480 and 1.2520.