Euro Remains Under Pressure But Is A Break Out Ahead?
Hourly chart for EUR/USD
The euro bounced back from 14 month lows against the dollar in the early morning trading session but many believe the gains are going to be capped as the expectations of an earlier than expected rate hike continue to remain. It is imperative to know that the Euro has been broadly under pressure since the European Central bank cut interest rates and introduced a loose monetary policy to kick-start a stagnating Eurozone economy.
In the past week reports released by the ECB which showed a lower than expected loan off take by the banks indicates that the current policy is doomed to fail in the near term. Traders and investors would be closely looking at economic data coming out of US with regards to the US home sales and durable goods data to get an understanding about the underlying strength of the US economy. A recent report released by a very prominent investment bank states that it sees the Euro trade at parity versus the dollar by the end of 2017, calling it a part of what has been termed by many economists as the “great stagnation.”
On the hourly chart for EUR/USD, the currency pair has been trading in a very narrow trading range with resistance on the upside at the $1.28664 and support at the upward sloping trend line near the $1.28441. The momentum indicator for the EUR/USD has given a buy signal but is showing signs of tapering indicative of the strong downward bias for the currency pair. The relative strength index has shown no signs of a reversal or strength which is a huge cause of concern for the bulls.
Long EUR/USD only if it closes above $1.28664 with a primary target at $1.28903
Short EUR/USD below $1.28440 with a intermediate target at $1.28251 and stop loss above $1.28664
Success = few pips, thousand times
Ben Myers is one of the most respected and trusted names in the financial trading industry. Following a long and successful career with HSBC, Bank of Ireland and running his own investment firm
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