Tomasz Wisniewski
Axiory Global Ltd.
Ok, so the up trend on the EURUSD is no longer a surprise for anybody. We can see that the number of shorts is record low and the number of the traders betting on a stronger EUR is on record highs. How long can it last? Today we will look on a weekly chart and we will try to estimate the potential targets for the current bullish sentiment. Or maybe there are no targets and the EURUSD will just fly away without any stops in the middle whatsoever.
When speaking about the potential targets we are on the one right now. This is a wide (around 100 pips, yellow) area created by the tops from the 2015 and 2016. That looks like a decent resistance, at least for the take profit action. Seeing the latest momentum it is possible that it will not work though. If not, the next potential target is the grey resistance (around 180 pips), which is created by the lows from the 2012 and 2010. If we would break those two without any stronger correction I would be very surprised. Traders are greedy but they need to take profits from time to time too.
We need to remember that strong EUR will become a problem for the top European exporters so countries, which are, by accident (yeah, right) the top ruling nations in the block. I guess they will try to trim the recent sentiment a little bit. As for now, especially with the candle from the last week, there are no reversal signals whatsoever. Only the fact that the price is high and is close to a resistance are not the significant reasons to go short. If you want to sell it would be nice to first see the bearish price action there, signs that demand is retracing and the supply is taking over. Currently I do not see any.
Follow us on Twitter @wisniewskifx and @AlpariRA
Trading FX/CFDs on margin bears a high level of risk, and may not be suitable for all investors. Before deciding to trade FX/CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. You can sustain significant loss.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.