EURUSD is trading at a great level right now, having rallied since mid-March to a level that traders are clearly undecided.
The pair reached 1.1466 on March 15 before correcting and the two rallies that have taken place since we have failed to see this broken level. In fact, it does not really come close and the inability to break above the downward trend line - 14 July peaks -. And 144-day simple moving average in this time suggests the pair continues to follow the downward trend in the longer term
That said, it does not seem to be too bearish appetite while quite yet. The recesses are yet purchased and lower long pile last two candles even suggests still occurs.
The key levels are 1.1380 for me to rise and the decline from 1.1050 to 1.11. At 1.1380, the 144-DMA and descendant trend line continues to ensure the resistance of the pair having already done several times.
The pair has found support around 1.1050 to 1.11 last Friday and was a key area several times this year. The lower end of this trademark also the neckline of the double top that formed since the June 2
One advantage of the double tops is their use in the provision of possible price projections depending on the size of them. With this in mind, a break of the neckline could cause a movement back towards 1.0712. Note that 1.0819 could be a strong level of support along the way being the biggest down side.
The pair may continue to be exchanged between these support and resistance levels for a little longer, but once one of them is broken, I think it could offer insight into whether traders are actually bullish on this pair, and the upward trend of the dollar will resume. I still believe that we could see parity by the end of the year, but a break above this trend line would make me much less confident.
Given the time of this picture, it is also helpful to consider the fundamental of the two currencies. The biggest currency disc is very often inflation and interest rates, and I do not think it's different.
As you can see from the chart below, all this uncertainty surrounding Greece has not been weighed on the pair of all, the price was mainly driven by the narrowing spread US Treasury -Bund. With the Federal Reserve may increase as early as September inflation rate and the euro area is expected to remain weak, I think it starts to widen again soon.
red and green candles are EURUSD price action. yellow line is the spread of the US Treasury-Bund
Source -. Eikon
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