EUR/USD Bearish Retracement Approaches Key Support Area Near Uptrend Line

Eurozone – German Trade Balance

Tomorrow, at GMT 6:00 a.m., the Destatis will release the monthly trade balance figure, which measures the difference in value between net import and export of goods over the past month.

The demand for export in Germany is directly correlated with the demand for the Euro, because the German economy makes up a large portion of the overall Eurozone economy. Hence, binary options traders analyze the monthly trade balance in order to gauge the strength of the EURO against other major currencies.

Last month, the German trade balance figure came out at 19.8 billion and the forecast for this month is currently set at 20.4 billion.

United States – Unemployment Claims

On Thursday, at GMT 12:30 p.m., the US Department of Labor will release the unemployment claims figure, which measures the changes in the number of people who claimed for unemployment insurance over the last week.

Binary options investors consider the unemployment claims data to be one of the most important fundamental indicators of the US job market. This is primarily because unemployment and consumer spending has direct correlation and an increasing number of unemployment claims indicate lower consumer spending in the economy, which makes up the bulk of the economic activity in the United States.

Last week, the US unemployment claims figure came out at 274,000 and the forecast for this week is currently set at a slightly higher figure, at 277,000.

Trade Recommendation for the EUR/USD

EURUSDDaily

Since forming a huge bullish outside bar (BUOB) on March 10, the EUR/USD has remained in a strong uptrend and formed an uptrend line in the process. After climbing around 790 pips since March 10, last week, the EUR/USD price finally started a minor retracement and fell around 245 pips. This bearish move came amid the formation of a handsome bearish pin bar on May 3.

As the US unemployment figure is expected to come a bit higher than last week and the German trade balance is expected to come out slightly better than last month, we believe the EUR/USD retracement will be over soon. However, traders should keep an eye on the price action near the trend line, because if the EUR/USD price penetrates below the trend line, it may attract additional bearish momentum.

Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the EUR/USD with their binary options brokers once the EUR/USD price penetrates and closes below the uptrend line.

Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and write on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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