The Euro resumed its rally last week after a one-week setback. The single currency was primarily driven higher by the weaker U.S. Dollar. The greenback fell sharply last week after the benchmark 10-year U.S. Treasury yields fell below 2% since late 2016 as investors raised their bets for a July Federal Reserve rate cut to 100%.
Last week, the EUR/USD settled at 1.1371, up 0.0159 or +1.42%.
The catalyst behind the price action in Treasurys and the EUR/USD was the dovish tone created by the Fed’s monetary policy statement, its “dot plot” projections and comments from Fed Chair Jerome Powell’s post meeting press conference.
Although policymakers voted 9 to 1 against a rate cut, investors feel the Fed is preparing for a rate cut since it dropped the word “patient” in its policy statement, indicated at least one rate cut in its “dot plot” projections and Powell said they are starting to lean toward accommodative.
Weekly Technical Analysis
The main trend is down according to the weekly swing chart, however, momentum has been trending higher since the formation of a weekly closing price reversal bottom during the week-ending May 24.
A trade through 1.1448 will change the main trend to up. The next main top comes in at 1.1570. A trade through 1.1107 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The main range is 1.0339 to 1.2555. The EUR/USD is currently trading inside its retracement zone at 1.1447 to 1.1185. This zone is controlling the longer-term direction of the Forex pair.
Weekly Technical Forecast
Given the upside momentum at the end of last week, buyers may take a run at an important resistance cluster at 1.1447 to 1.1448. The first price is a 50% level. The second is the last main top.
Taking out 1.1448 will change the main trend to up on the weekly chart. It will also put the EUR/USD on the bullish side of the long-term retracement zone. If this creates enough upside momentum then look for the rally to possibly extend into the next main top at 1.1570.
On the downside, the major support remains the long-term Fibonacci level at 1.1185.
This article was originally posted on FX Empire
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https://finance.yahoo.com/news/eur-usd-forex-technical-analysis-040353841.html
2019-06-24 09:11:37Z
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