EURUSD leaves no doubts and breaks the 1.208
|The last time, we were writing about the EURUSD on the 4th of January, when the price was close to the ultra important resistance on the 1.208 and there was a chance for a bigger bearish correction. Back in that time, we wrote:
“Long-term sentiment for the EURUSD definitely stays positive but we have to be aware of a possible correction, especially that: 1) the place is good to sell now and 2) we are after a very strong upswing (360 pips in few weeks). All that together allows us to be slightly more bearish for the EURUSD in the short-term. “
That was a good call, because after this, the price wet significantly lower and made a nice 140 pips correction. It was shaped as a flag and ended last Thursday. The price broke the upper line of this formation and by doing that, came back into a buying mode. After this, all eyes were on the Fridays macro data from the US. Traders were not very impressed with the better CPI data though. Actually, important decisions were made much earlier and the direction was set before the new data hit the screens. EURUSD is now giving a very strong buy signal, after the price broke this crucial resistance on the 1.208 (yellow). As a reminder: that was an area, which was used as a support in the 2012 and as a resistance in the 2017, so importance of that level was pretty obvious.
Worth mentioning is the fact that the last few weeks on the main pair were very technical. The price was climbing up, making higher highs and lows and created five flags in a row (together with the latest one, mentioned above). As for the current sentiment, we are again seeing a potential for another bearish correction. We are already around 130 pips above the 1.208 and it would be nice to test it as a closest support. Long-term situation does not change, it looks all good for the buyers.
Follow us on Twitter @wisniewskifx and @AlpariRA
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.