EURUSD Approaches A Record And Range High

Trading Tip - EURUSD is a closely watched pair; and as it approaches its record high's, the market's focus will only intensify. However, despite this attention, the pair has also carved a notable range. A wedge (ascending triangle) has defined price action for the long trending pair since October. Essentially, the 1.4900/50 area is defined by a triple top whose first test also happens to be the record high for EURUSD. Nonetheless, there is considerable risk in taking this range trade considering the major swing lows over the past four months have steadily risen; and the proximity of record highs could encourage a run to flush stop. Our strategy has a stop set above the record high, but an attempt to break this high could easily force a stop. Considering the risk and our wide stop, we recommend trading this at half size. To further reduce risk inherent to the economic docket, we will cancel any open orders by the US close on Tuesday or if spot hits 1.4725 before we are entered.

Event Risk Euro Zone and US

Euro Zone - There are a number of Euro Zone indicators that may pressure fundamental trends, but they will likely struggle in moving the euro. Consumer inflation, retail sales activity, and unemployment for the region typically do not encourage much action from the currency, but an outsized surprise could certainly build momentum. Instead, the real potential for volatility and breakouts will come from German docket. Monday and Tuesday will report on business and consumer confidence respectively; and a big shift here could charge growth forecasts. On the following day, the employment change indicator has grown every more dependent on further improvement. One negative reading could trigger a wave of fear. Finally, retail sales will measure the health of spending - a key GDP component.

US - The US economic docket will awaken from its fundamental coma this past week. Though most of the scheduled economic releases scheduled for the coming week are not guaranteed market movers, most have had a significant impact on price action one time or another in the recent past. Monday will begin a trend of housing releases that follows into Wednesday and includes: existing home sales, the S&P index, fourth quarter house prices and new home sales. This lot will be used to gauge Bernanke's outlook for the sector and for general economic growth. Also in the mix is the Conference Board consumer confidence report, the durable goods number, and personal spending. Monday March 3 brings the first major market mover: the ISM factory report. It will also be important to watch the heavy volume of potentially market moving Fed speak smattered throughout the week.

Data for February 25 - March 3		Data for February 25 - March 3
Date	Euro Zone Economic Data	Date	US Economic Data
Feb 26	German IFO - Business Climate (FEB)	Feb 25	Existing Home Sales (JAN)
Feb 27	GfK Consumer Confidence (MAR)	Feb 26	Consumer Confidence (FEB)
Feb 28	German Employment Change (FEB)	Feb 26	House Price Index (4Q)
Feb 29	German Retail Sales (JAN)	Feb 27	Durable Goods (JAN)
Feb 29	Euro Zone CPI (JAN)	Feb 28	Gross Domestic Prices (4Q P)
Feb 29	Euro Zone Unemployment Rate (JAN)	Mar 3	ISM Manufacturing (FEB)

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