The EURUSD rallied back towards the 1.2200 level on Friday, despite the United States posting its strongest Core PCE inflation number since 1992, and US stocks taking a tumble on the weekly price close.
One of the reasons that the EURUSD pair rebounded from the 1.2130 region is that large amounts of negative MACD price divergence were reversed on the lower time frames.
Last week I mentioned that negative divergence was present, and that bulls may be lurking around the 1.2130 level, in expectation of a coming price rally towards the 1.2300 area, and possibly higher.
Remember, the EURUSD pair is in an uptrend across the upper and the lower time frames, meaning that traders should be buying into dips, so this sudden recovery was not unexpected, despite the hot Core PCE data.
Financial markets will likely make their next big move after the release of US jobs data this week. It is a shortened trading week due to various bank holiday, so we could see plenty of market action between Tuesday and Friday as traders get positioned for the headline number on Friday.
Personally, I expect that the EURUSD pair will continue to head higher, despite fears over QE taper due to inflationary pressures. EU inflation this week could also be a big market mover for the single currency if any significant changes are present in the headline number.
Sentiment towards the EURUSD has dropped since last week. The ActivTrader market sentiment tool shows that some 62 percent of retails traders are negative towards the EURUSD. This is a good sign for bulls.
EURUSD Short-Term Technical Analysis
The EURUSD pair has formed a broadening wedge pattern across the four-hour time frame. Last week a false breakout under the wedge took place, and the price is now back inside the wedge.
See real-time quotes provided by our partner.
These patterns are typically categorized as bearish. However, I think we could see the pattern invalidated. Bulls need to move the price above the 1.2300 level to do this.
If the pattern was invalidated a huge breakout in the EURUSD pair towards the 1.2440 price area is very likely according to the chart.
EURUSD Medium-Term Technical Analysis
EURUSD bulls need to breach the 1.2330 resistance area to create a huge, inverted head and shoulders pattern, and subsequently invalidated a large head and shoulders pattern.
This week it is critical that the EURUSD pair reaches the 1.2330 level over the to cement its future upside price path. I suspect the EURUSD pair is headed towards the 1.2700 to 1.2800 price area over the long-term.
See real-time quotes provided by our partner.
A comprehensive website for traders, both experienced and new! Checkout our content and learn how to invest and speculate in the markets using margin traded products. Our team of educators has extensive experience and is here to help. Enjoy!
© 2020 YouTrading UK - Leaders in Trader Training.
Cookie | Duration | Description |
---|---|---|
__cfduid | 1 month | The cookie is used by cdn services like CloudFare to identify individual clients behind a shared IP address and apply security settings on a per-client basis. It does not correspond to any user ID in the web application and does not store any personally identifiable information. |
_wpfuuid | 11 years | This cookie is used by the WPForms WordPress plugin. The cookie is used to allows the paid version of the plugin to connect entries by the same user and is used for some additional features like the Form Abandonment addon. |
cf_use_ob | This cookie is set by the provider Cloudflare content delivery network. This cookie is used for determining whether it should continue serving "Always Online" until the cookie expires. | |
cookielawinfo-checbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-advertisement | 1 year | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |
Cookie | Duration | Description |
---|---|---|
YSC | session | This cookies is set by Youtube and is used to track the views of embedded videos. |
Cookie | Duration | Description |
---|---|---|
_ga | 2 years | This cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors. |
_gid | 1 day | This cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form. |
Cookie | Duration | Description |
---|---|---|
_fbp | 3 months | This cookie is set by Facebook to deliver advertisement when they are on Facebook or a digital platform powered by Facebook advertising after visiting this website. |
fr | 3 months | The cookie is set by Facebook to show relevant advertisments to the users and measure and improve the advertisements. The cookie also tracks the behavior of the user across the web on sites that have Facebook pixel or Facebook social plugin. |
IDE | 1 year 24 days | Used by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile. |
test_cookie | 15 minutes | This cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies. |
VISITOR_INFO1_LIVE | 5 months 27 days | This cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website. |
Cookie | Duration | Description |
---|---|---|
_gat_UA-42160853-2 | 1 minute | No description |
cf_ob_info | No description | |
CONSENT | 16 years 8 months 3 days 6 hours 2 minutes | No description |