Overbought EUR/USD Ready for Bearish Correction – Quick Trading Signal!

The EUR/USD pair was closed at 1.16543 after placing a high of 1.16579 and a low of 1.15810. The EUR/USD pair extended its 6th-day bullish rally and rose above 1.16500 level on Friday amid the broad-based U.S. dollar weakness.

The declines in greenback boosted the currency pair EUR/USD as the marginal gains in the U.S. dollar failed to retain their position. Moving on, the German IFO survey for June is scheduled to release later today at 0800 GMT. The headline IFO Business Climate Index is seen improving to 89.3 versus 86.2 previously.

From the forecasted view, the Current Assessment sub-index will likely reach 85.0 this month, while the IFO Expectations Index – indicated firms’ projections for the next six months – is likely to come in at 93.7 in the reported month vs. 91.4 last.

While introducing the German business sentiment index, this data is normally released by the CESifo Group, which is closely followed as an early indicator of Germany’s current conditions and business expectations. However, the Institute surveys more than 7,000 enterprises to assess the business situation and their short-term planning. The positive economic growth is seen as bullish movements for the shared currency; likewise, low figures are considered as negative (or bearish).

Investors will be will keeping their focus on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum for the gold. The Durable Good Orders release and German IFO survey for June will be key to watch. Additionally, the U.S. stimulus progress will be closely observed ahead of the U.S. Federal Reserve (Fed) monetary policy decision, which is due to happen on Wednesday.

The EUR/USD traded sharply bullish amid weaker dollar to trade at 1.1704 level, and closing below 1.1730 resistance level can trigger selling until 1.1685 level today. On the lower side, the pair may gain support at 1.1686 level. A bullish breakout of the 1.1730 level can extend the buying trend until the 1.1788 level. While the violation of 1.1685 can lead to EURUSD prices towards 1.1589 level. Check out the trade plan below…

Entry Price – Sell 1.17056

Stop Loss – 1.17456

Take Profit – 1.16656

Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

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