Markets have been more stable so far this week, as investors’ assessment of the risks to European lenders has improved, states Fawad Razaqzada of Trading Candles.

This has supported the European stock markets and the single currency. Assuming the calm in Europe continues, then investors’ focus will return to monetary policy. The divergence in monetary policy between the Fed (becoming dovish) and the ECB (remaining hawkish) points to appreciation in the EUR/USD exchange rate.

In this quick video, I will explain price action and levels to watch on the EUR/USD for tactical trade ideas. 

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