Notwithstanding
Fed’s announcement from last Wednesday, the long term
fundamentals still are in favour of USD. Some
of the reasons are the better performing US economy compared to that in the
Euro zone, the increasing interest rate differential and the difference in
monetary policies. Not to forget the indebtedness of peripheral countries of
the Euro zone and refugee crisis.
In this respect EUR/USD has settled within wide range, close to the upper
boundary of side movement, which is visible on the weekly chart.
The first resistance might be seen at level of 1.1374. Closing above it on the
daily chart will show that the bulls prevail. The next resistance is on the
upper boundary of the side movement in the area of 1.1500. If price close above
it on the daily chart, we will have a clearer idea that side movement ends. In
cases like this, we can see an important level of resistance becoming support.
Such development provides better chance for increase.
On the other hand, if the price meets those levels of resistance and can not
close above in the daily chart, we can expect that it will remain in the range.
Then we may expect test of 1.1060 level and the middle Bollinger band.
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