Originally published by AxiTrader
Earlier this month in my very long term look at the Euro after Emmanuel Macron's pro-Europe election victory wrote that A close above 1.10 on the monthly charts would be a very bullish sign for the Euro.
I also said however that the euro looked over cooked short term and could see a pullback.
I say that by way of background to look at the current EUR/USD chart.
After running to a high around 1.1020 in the wake of the Macron victory Euro did indeed pull back and found support at the upper end of the 1.0820/50 region into which Euro had gapped after the first round of the French presidential election process.
Since that low of 1.0838 on May 11 the Euro has now risen close to 250 points to sit at 1.1081 this morning. That's a clear break to a new high and the strongest level since US presidential election night last November.
The high on that day of 1.1299 is now the target for the Euro.
But can it get there?
In the short term it is again looking a little overcoooked on the daily charts. And certainly CFTC data for last week showed that big speculators are net long Euro for the first time since May 2014.
That is not a typo. And that net long position is likely to have increased materially in this rally.
So there is much expectation built into this Euro move.
Yet that's the point isn't it. The French election has taken away a clear pain point for investors. Throw in Angela Merkel's party's weekend victory in the North Rhine-Westphalia election and the European project appears to be on the right track again.
And of course European data is printing so much better than the dataflow from the US at the moment.
So the preconditions for this rally to continue on a multiweek basis to 1.13 perhaps 1.1450 are intact.
Have a great day's trading.
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