Slowly Forming a Double-Top Pattern

The EUR/USD exchange rate was little changed after the US published another set of positive economic data. 

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• Buy the EUR/USD pair and set a take-profit at 1.0910.
• Add a stop-loss at 1.0800.
• Timeline: 1 day.

• Set a sell-stop at 1.0800 and a take-profit at 1.0700.
• Add a stop-loss at 1.0900.

The EUR/USD exchange rate was little changed after the US published another set of positive economic data. It was trading at 1.0835 on Thursday, which was a few points below the highest point this week. The pair will have a busy day ahead as Europe and the United States are set to publish several important economic numbers.

On Tuesday, the Conference Board published strong consumer confidence numbers. The report showed that confidence among consumers rose slightly in March even as inflation remained a thorn in the flesh for most people.

On Wednesday, a separate report showed that pending home sales rose by 0.8% in February after jumping 8.1% a month earlier. This increase was bigger than the median estimate of a 2.3% drop. The pending home sales index rose from 82.5 to 83.2.

These numbers show that the American economy was doing moderately well even as interest rates jumped to the highest point in years. This coincides with a report that showed that CFOs in the US upgraded their outlook on the economy. They expect that it will expand by about 1.4% this year.

Therefore, there is a likelihood that the Fed will maintain a moderately hawkish tone considering that the banking crisis seems to be ending. The next key American data to watch will be the final reading of US Q4 GDP data. This being the final reading, the impact on the pair will be limited.

Instead, traders will focus on Friday’s PCE index data. This is an important figure since it is Fed’s favorite inflation metric.

In Europe, the EUR/USD pair will react to the flash inflation numbers from Spain and Germany. Estimates show that inflation in the two countries dropped gradually in March. The European Commission will also publish the latest business and consumer confidence figures.

The EUR/USD exchange rate has been rising since March 8 when it fell to a low of 1.0523. It has rebounded to 1.0850, which is along the 61.8% Fibonacci Retracement level. The pair also jumped above the 25-day and 50-day exponential moving averages (EMA). It has moved above the Woodie pivot point.

Most importantly, the pair seems to be forming a double-top pattern whose upper part is at the first resistance point at 1.0910. Therefore, the pair will likely continue rising as buyers target the double-top level.