EUR/USD touches channel’s boundary
Updated
Morning outlook - EUR/USD touches channel’s boundary
- In accordance with expectations, the common European currency continued the surge against the US Dollar in a short-term ascending channel until it met a resistance barrier formed by the upper trend-line of a senior descending channel.
- For this reason, the currency exchange rate is expected to move downwards. This course is supported by the overall market sentiment, which is 71% bearish.
- On the other hand, a summary of various technical indicators for the upcoming trading day sends a strong buy signal.
- However, both the situation and the forecasts can be altered after release of information on the German Economic Sentiment, which might slightly devaluate the Euro and accelerate the fall.
Trade closed: target reached
EUR/USD finds support at 1.1754As it was expected, a release of information on the German Economic Sentiment, which appeared to be even less than analysts anticipated, notably affected valuation of the Euro.
Namely, it dragged the currency pair down by 0.34%. And the only obstacle that stopped the fall was the weekly PP located at the 1.1754 level.
Given that this barrier practically coincides with the bottom edge of a junior ascending channel, the exchange rate should not plunge any further.
From technical perspective it is expected to make a rebound and start to move towards the 1.1800 mark.
However, this scenario might not materialize due to the ECB President Mario Draghi speech that will be delivered at 7:00 GMT and that most likely will cause significant volatility in the markets.
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