EURUSD Jan 27 to Jan 31 Outlook

Recap
Expected more downside last week and it looked like it was about to happen with the bear flag setup into Wednesday. Then everything changed by the eco report. Euro zoomed back up from a dirty bottom giving us the Y+1 target. Y+1 tagged and tried to breakout. It failed. Closed the week below Y+1 and above midpoint.

Outlook
Just like Cable moved by a statement, euro moved by a report that cannot be trusted at all. It tells us the environment is not stable. It happens when longer term players have very different outlook for the market creating huge consolidation zone that drives the shorter term traders insane.

In the case of euro, 1.35 is the official preferred rate as they stated last year while 1.38 is not “too desirable”. Work within the rules set by the officials for now should be a safe play.