There’s a potential short-term retracement on EUR/USD’s 1-hour time frame which could come into play today. 

There’s a falling trend line connecting the pair’s recent highs while the 50% Fib is in line with a former support around the 1.3070 area.

A few medium-tier euro zone reports are on tap for today, the biggest of which is the German unemployment change report. After posting a 21K increase in joblessness for April, only a 7K rise is expected this time. A higher than expected figure would mean that the jobs sector is still unstable in euro zone’s largest economy, which could be bearish on the euro.

As for the US, the core PCE price index and personal spending and income reports are due. The price index could show a small improvement in inflation while personal spending is expected to be up. If that’s the case, the dollar could draw support from good data.

A stop above the 1.3100 major psychological level would yield a good reward-to-risk when shorting this pair.

By Kate Curtis from Trader’s Way