In the event of a downward trend
- Take a sell trade for the EUR/USD currency pair and set the Take Profit order at 1.0100.
- Set the stop loss order at 1.0250.
- Schedule: a day or two.
In the case of an upward trend
- Set the buy stop order at 1.0235 and the take profit order at 1.0300.
- Set the stop loss order at 1.0160.
EURUSD price moved sideways during the US and Asian sessions as investors focused on the recent spending package by the Senate. The pair was trading at 1.0188 where it has been in the past few days.
The energy crisis in the European Union
EURUSD moved sideways following the US Senate voted in favor of Joe Biden’s Climate, Tax and Healthcare Act. The bill would provide billions of dollars to fund clean energy projects such as wind and solar power.
It will also lower some drug prices by allowing Medicare to negotiate with manufacturers. Most importantly, the bill will be funded by introducing a minimum tax of 15% for businesses that generate more than $1 billion in sales each year. It also aims to raise billions by levying a 1% tax on share buybacks.
The pair also moved sideways as more Fed officials warned that the bank will continue to raise interest rates in an effort to combat inflation. In a statement, Mary Daly warned that the bank will continue to raise interest rates in the coming months.
There are no major economic data due from the US and Europe on Tuesday. Therefore, investors will focus on the upcoming US inflation data due on Wednesday. Economists expect the data to show that inflation in the country eased slightly in July this year as gas prices fell.
Another thing to watch is the ongoing European energy crisis. Russia has reduced gas supplies to Europe to regarding 20% of its capacity, and analysts believe the situation will get worse by summer.
The situation is likely to get worse as the summer continues to be hotter than usual. The Norwegian government warned in a statement on Monday that it may stop selling electricity to European countries soon. The government said the country’s hydroelectric power stations have extremely low water levels. This might harm European countries such as Germany and Denmark.
Forecast for the EUR/USD currency pair
The 4 hour chart is showing that the EURUSD has been moving sideways lately. As a result, it is consolidating along the 25-day and 50-day moving averages. It is also located between the important support and resistance at 1.0131 and 1.0276. It is also located between 23.6% and 38.6% Fibonacci retracement.
Therefore, the pair is likely to remain in this range as traders await US consumer and producer inflation data. However, in the near term, the pair is likely to see a breakout to the downside as sellers target parity.