A busy week for the euro, after the ECB kept interest rates at 0%. The QE purchasing program remained on hold, which saw a negative shock selling wave push the EUR/USD to 1.1166. This tested strong support and it re-bounded to 1.1237 on Friday.
Yesterday, the euro was busy with the French Parliament election. As Macron prepared for his party's crushing victory, EUR/USD showed signs of recovery. The cross reached a high of 1.1217 and is expected to rise further, after the US Dollar Index plunged to a low of 97.09.
Technically, the pair plunged to a low of 1.1197, testing support at 1.1190 successfully. The EUR/USD managed to break or close above Friday's high of 1.1237, indicating that it could re-retest 1.1268 (R2). Add to that, the daily 4-EMA and 9-EMA hasn't crossed over with 18 EMA yet, which keeps bullish momentum in tact.
Trend: Bullish / Sideways
Resistance levels: R1 1.1236, R2 1.1268, R3 1.1287
Support levels: S1 1.1190, S2 1.1163, S3 1.1107
Summary: Current technical indicators shows a bullish momentum for EUR/USD, boosted by positive fundamentals with the French Parliament result yesterday and negative events revolving around the US dollar. This suggests that further hikes are likely. Breaking above 1.1236 would spark further attacks with expectations for a test at 1.1268, and if the market closed above this price, then bullish momentum would remain. Closing above 1.1160 is positive. On the other hand, if the market closed below 1.1160, then a pattern of lower lows between Wednesday and Friday should be taken as a sign of trend reversal. A close below 1.1100 would confirm a trend reversal.
Save