"The trend is your friend until the bend at the end," said famed trader Ed Sykota, and his advice seems more applicable than ever to EUR/USD at the moment.

The Euro-to-Dollar exchange rate is rising in a strong uptrend which keeps making new highs.

Last week the pair reached 1.2094 after superceding the previous 1.2069 peak.

The pair broke higher following the European Central Bank (ECB) rate meeting at which the ECB surprised everybody by apparently dismissing concerns about the strength of the Euro.

We expect the uptrend to extend further, with a break above the 1.2069 highs heralding a follow-through higher towards the next target at 1.2290 just below the R2 monthly pivot at 1.2293.

Monthly pivots are levels used by traders to trade counter to the main trend and therefore can present roadblocks to the dominant trend, where it can stall or reverse.

There are signals of weakness on the chart, but these are not substantial enough to argue for a reversal of the trend.

The MACD indicator, for example, is diverging bearishly with the exchange rate, revealing a weakening in upside momentum, which could a precursor to a pull-back.

The pair has also formed into a shooting star candlestick pattern at the recent highs, which is a reversal pattern and adds to evidence of a correction as it did at the previous highs.

However, it is just a short-term signal and doesn't discount the possibility that the trend will continue making new highs.

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Data and Events to WAtch for the Euro

Apart from commentary from ECB governing council members throughout the week, the main data releases and events are concentrated at the end of the week, when wage data and the trade balance are released at 10.00 BST on Friday 18.

Also on Friday is the start of the meeting of the EU's financial ministers which could provide interesting commentary.

As for commentary from ECB officials, the week starts with ECB's Coeure at 8.00 on Monday 11, Constancio at 14.45 on Tuesday, Mersche at 11.45 on Thursday and then again at 17.00, and Nouy at 7.00 on Friday, followed by Lautenschlager at 9.15 on the same day.

Analysts will be paying specific attention to any further clarification of the views of ECB officials on the timing and rate of the tapering of the ECB's asset purchase program.

Data and Events for the Dollar

From a hard data perspective the week kicks off on Thursday, September 7, when inflation data is released at 13.30 BST.

Headline inflation is expected to show a rise of 1.8% year-on-year from 1.7% in August of 2016.

Core inflation, however, is forecast to slow to 1.6% in August from 1.7% previously.

Inflation has an impact on when the Federal Reserve raises or lowers interest rates, so a higher-than-expected rise in inflation would probably be more likely to result in the Fed raising rates, which would push up the value of the Dollar.

Friday sees the release of other significant data in the form of Retail Sales, at 13.30, which is forecast to show only a 0.1% rise in August compared to July.

Retail Sales not including cars, however, is likely to show a more robust 0.4% rise. Ar 14.15 Industrial and Manufacturing Production is released and then at 15.00, we shall see the release of the important Michigan Sentiment Gauge.