Third session of recovery for the Eur/Usd quotations. The extension of the bullish mini-trend in place could provide an additional leg toward the former static support at $ 1.2165
The intraday and real-time data on the Eur/Usd Chart are taken from OTC product quotes.
Today the recovery of the Eur/Usd prices continues in the direction of the former static and psychological support at 1.20. The last three sessions of the forex market have in fact seen the euro catch up with its American counterpart, with quotations that in the night session exceeded 1.1950-1.1960.
The current rebound, described by the series of rising lows of 9.10 and 11 May, must be contextualized in the perspective of the main bearish movement, the one that involved the change between the end of April and this first half of May.
New opportunities in view of the Eur/Usd exchange rate?
The wide distribution phase that has involved prices since January 26 this year actually ended on April 26 when the Eur/Usd prices came down from the rectangle consisting of a roof at 1.25 and static support at 1.2165 dollars. With the violation of the latter level and, previously, of the 200-period moving average, the exchange between the single currency and the greenback has generated a significant reversal signal with respect to the main trend followed by prices over the last year.
Subsequently, the descending parabola drawn by the Eur/Usd stopped after reaching the first intermediate target at 1.1916 and meeting the static support at 1.1837. The recent rise in direction 1,1982 could be interpreted as a mini trend in opposite direction to the movement drawn in recent weeks, whose goal would seem to confirm the main trend change taking place on the Eur/Usd chart.
In this regard, monitoring exchange rate developments in the coming weeks is crucial. The extension of the bullish mini-trend in place could provide an additional leg towards the former static support at 1.2165 dollars. If this were the case, investors with a negative view of the Euro-dollar could take advantage of this movement to build or increase short positions on instruments that replicate the performance of the currency pair.
Operational strategies on Eur/Usd
From this point of view, whoever had a bearish view on the exchange rate could enter into a short position at 1.206 and fix the stop loss at 1.216 to avoid any bullish flames that would contradict the change of direction of the main trend. The short-term target of this strategy can be identified again at 1.18 while the medium-term target would remain at 1.1730 dollars. Short-term speculative Long’s could foresee inputs at 1.195 with stops at 1.182 and targets at 1.21.
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The euro-dollar exchange rate will continue to appreciate and the current phase of weakness will be only temporary.
Amundi, one of Europe’s largest asset managers, came back to the pair when it slipped below 1.20, long before Trump announced its decision to abandon its historic nuclear agreement with Iran.
“EURUSD still has room to appreciate”, said Silvia Di Silvio, Strategist of Amundi, who emphasized those fundamentals that, according to her, will once again contribute to the strengthening of the single currency and consequently to the appreciation of the euro dollar itself.
(The development of EURUSD over the last month)
What to expect from the euro dollar?
Amundi’s forecasts seem today rather far from reality. The euro-dollar exchange rate is in fact trading under the banner of a weakness that is now evident and has forced the pair to slide from 1.21 to 1.19 in just one week.
The strong appreciation of the greenback, which is currently experiencing a particularly positive phase, is at the root of this trend.
And yet, for Di Silvio, the fundamentals that could strengthen the single currency have not yet been exhausted.
“The Eurozone’s macroeconomic growth environment remains above potential, with the ECB continuing to reduce monetary policy stimulus, albeit at a very gradual pace.