German Election Unsettles the EURO
|S1: 1.1875||R1: 1.2000|
|S2: 1.1750||R2: 1.2075|
|S3: 1.1460||R3: 1.2250|
The EURO opened the week with an opening gap of nearly half a cent in reaction to the German election that saw Angela Merkel elected for a fourth term as Germany’s Chancellor. The overhead resistance level at 1.2000 is proving extremely difficult for the EURUSD to break through, and indicator weakness is now creeping into the larger timeframes.
The EURUSD has again found itself hovering around the support level of 1.1875, but as the image above illustrates, there is a potential head and shoulders pattern forming on the daily chart. This pattern is also being confirmed with weakening MACD, and if the neckline should break, a move down to the 1.1700 level could be expected.
Fundamental news this week will be dominated by key speakers, with President Draghi kicking off proceedings last night, with another scheduled speech on Saturday. Traders should watch out for Core Durable Goods Orders tomorrow night and pay close attention to the scheduled presentation by Fed Chair Yellen earlier in the evening.