EUR/USD: Impending “golden cross” may draw bids for the single currency


  • EUR/USD regains pose despite risk-off tone in the US stock futures. 
  • Daily chart shows an impending golden crossover, a long-term bull market indicator. 
  • Impending bullish technical developments could bode well for the common currency. 

EUR/USD is reporting moderate gains at press time and could rise further as a widely-followed technical indicator is about to turn bullish for the first time since December 2019. 

The pair is currently trading near 1.1250, representing a 0.10% gain on the day, having put in a low of 1.1225 during the Asian trading hours. The pair has managed to add 25 pips despite the risk-off tone in the financial markets. 

The S&P 500 futures are down 0.6% on the day at press time, as recovery concerns fueled by rising infection numbers in the US and China are overshadowing optimism over policy stimulus. 

Golden cross

The pair's 50-day simple moving average (SMA) has already crossed above the 100-day SMA and looks set to rise above the 200-day SMA in the next couple of days. The resulting golden crossover, the bull cross of 50- and 200-day SMAs, would be the first in six months. 

As per the technical analysis theory, the golden cross is an indicator of the long-term bull market. As such, technical traders may buy euros in the run-up to confirmation of the crossover. 

Traders, however, should note that the golden cross is based on moving averages (backward-looking data) and tends to lag prices. Some observers also consider it as a contrary indicator, which traps buyers on the wrong side of the market. 

Also, coronavirus fears and geopolitical tensions could play spoilsport. The dollar will likely draw bids, pushing the EUR/USD pair lower if the tensions between the US and China over the Uighur bill escalate. 

The Eurozone data docket is light on Thursday with just European Union's monthly Economic Bulletin due for release. Across the pond, the focus will be on the US weekly jobless claims.

Technical levels

    1. R3 1.1377
    2. R2 1.1336
    3. R1 1.129
  1. PP 1.1248
    1. S1 1.1203
    2. S2 1.1161
    3. S3 1.1116

 

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD bounces after upbeat COVID-19 cure news

EUR/USD is trading above 1.13, rebounding from the lows. Gilead reported that its drug Remdesevir substantially reduces mortality among COVID-19 patients. The news boosted stocks and weighed on the dollar. US coronavirus statistics are due out.

EUR/USD News

GBP/USD recaptures 1.26 as the market mood improves

GBP/USD is trading above 1.26 as the market mood improves and the safe-haven dollar retreats. Investors are shrugging off Brexit concerns and focusing on hopes to cure coronavirus. US COVID-19 statistics are due out.

GBP/USD News

XAU/USD consolidates daily gains above $1,800

After advancing to its highest level since September of 2011 at $1,818 on Wednesday, the XAU/USD pair staged a correction and briefly dropped below $1,800 on Thursday.

Gold News

Cryptocurrencies: War for dominance hit the bedrock of the market

Bitcoin tried to regain market share and activated sales in the Altcoin segment. BTC/USD, ETH/USD and XRP/USD are looking for supports and a rebound to push them to new elative highs. The current compression on the XRP/USD chart could trigger an exploding movement.

Read more

WTI once again breaks $40 per barrel after trading lower in early EU trade

There has been quite the bounce in WTI since the EU session after some strong selling pressure during Thursday and overnight. Once again on Friday's session, the price has taken the USD 40 per barrel handle. 

Oil News

Forex MAJORS

Cryptocurrencies

Signatures