TECHNICAL ANALYSIS

EUR / USD trades higher, but gains are currently limited by late March highs


EUR / USD is up that day in a weaker dollar, but faces resistance from highs at the end of March at 1.1147-63

EUR / USD D1 01-06
See here for global coronavirus case data

The above region remains a key line in the sand limiting further gains in the pair after buyers have drawn on a break above 1.1000 and the MA at 200 days (blue line) since the week. last.

Looking ahead, the week and the month will be difficult for the euro side of the equation to cover, starting with the ECB meeting on June 4 this week.

The central bank is likely to announce an increase in the size of its PEPP measure, but it will be interesting to see to what extent and for how long it will choose to do so.

Again, remember that at its current rate of purchases, the program should reach its goal by mid-September or October this year.

Further on, euro traders will also need to take into account the risks of Brexit as well as how the EU stimulus package will unfold before the European summit later this month.

Back to the technical picture, buyers should try to make their way above the resistance region around 1.1147-63 and the 61.8 @ 1.1167 retracement level to claim further upside, but this can be stretched unless the dollar capitulates more.

On the euro side of the equation, the above risks could keep gains more cautious for now. But a movement above the summits at the end of March opens the way towards 1.1200-40.

As for sellers, a lot of work remains to be done, but the most important is to keep the price action below the highs at the end of March before trying to exceed 1.1100 for beginners.

Tags

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close