Special Report: Where is Euro Strengthening?
Since the beginning of 2017 we can see that the euro managed to strengthen against the USD and even touched the highest level in 13 months. Will the strengthening of the euro continue? What opportunities can you take advantage of in forex trading?
The last EUR / USD daily rally took place on July 11, 2017, against the backdrop of a weakening USD, one of which was caused by President Donald Trump’s eldest son’s email scandal which showed that he thanked Russia’s assistance during his father’s presidential campaign last year.
The EURUSD rally has occurred even since the first week of 2017. Strengthening of the euro continues to occur until it reaches the resistance area at the range 1.14600-1.17150. Technically, the resistance area was formed from the previous movement recorded from May 2015, August 2015 to the movement between March-April 2016.
We can also see that the weekly weekly chart movement is generally sideways since March 2015. Based on this move, the last rally occurred from the support area in the range of 1.05200-1.03400 since the beginning of 20117.
Currently EURUSD is in the resistance area as mentioned above. If at this time we pay attention to the weekly chart, it is seen that overbought indications have been shown by stochastic and CCI.
So, the technical facts are:
- EURUSD is at the annual resistance area
- Overbought indications are seen from weekly stochastic and CCI charts
Therefore, technically there is a possibility that the euro will weaken against the USD if the weekly stochastic and CCI manage to confirm the sell signal. In other words, there is a possibility that EURUSD will move bearish for the long term.
Where’s the Target?
Technically speaking, the EURUSD’s long-term target decline based on the technical analysis above is around 1.10250, with a note if bearish signals are confirmed on the weekly chart.
The euro has the potential to continue to weaken to the range 1.05200 if it breaks below 1.10250.
Even so, this bearish scenario will fail if the price actually breaks above 1.17150. If a break occurs valid, it will open the chance for a bullish move to the range 1.20350-1.24000.