Euro rally resumes on ECB expectations
Euro Rally Resumes on ECB Expectations
Euro extends recent rally against the dollar today with EUR/USD hitting as high as 1.1211 so far. The common currency continues to draw support from the expectation of a hawkish twist in ECB's June meeting. Also, based on recent solid economic data, there is a realistic chance of upward revisions in the central bank's staff projections to be released at that meeting. Indeed, Euro's strength is even clearer considering that fact that it now overtakes Yen as the second strongest major currency for the week, following Swiss Franc. On the other hand, Dollar's recovery was weak and short lived as it's also back under some selling pressure against Sterling.
EUR/USD Weekly Outlook
EUR/USD's rally extended to as high as 1.1211 last week after some intra-week consolidation. Initial bias remains on the upside this week for 138.2% projection of 1.0339 to 1.0828 from 1.0569 at 1.1245, which is close to 1.1298 key resistance. We'll stay cautious on strong resistance from 1.1245/98 to limit upside and bring reversal. Break of 1.1075 minor support will turn bias back to the downside for 1.0838 support. However, sustained break of 1.1298 will carry larger bullish implications.
In the bigger picture, the case for medium term reversal continues to build up with EUR/USD now far above 55 weeks EMA. Also, bullish convergence condition is seen in weekly MACD. The focus will now be on 1.1298 key resistance. Rejection from there will maintain medium term bearishness and would extend the whole down trend from 1.6039 (2008 high). However, firm break of 1.1298 will indicate a reversal. In such case, further rally would be seen back to 1.2042 support turned resistance next.
In the long term picture, the case for completion of down trend from 1.6039 (2008 high), and long term bottoming at 1.0339, is starting to build up. The decisive break of 1.1298 will bring rise back to 1.2042 as first resistance. And in that case, we should at least see the rally back to 38.2% retracement of 1.6039 to 1.0339 at 1.2516.
Now is your chance to make a profit!
Open an account here!