Euro Could Be Fighting Toward a Breakout
The euro has paused this year after a big surge in 2020, but now it may be getting ready for another move.
Notice the downward-sloping trendline along EURUSD’s highs in early January and late February. The currency pair broke above that resistance last week and is now trying to turn it into support. MACD has also been trending higher for the past month.
Second, compare the weekly chart to price action in 2018. At that time, the euro surged to a new three-year high but was unable to hold its 50-week simple moving average (SMA). This time, however, it bounced at that line:
Finally, consider the economic data -- especially this week’s Zew reading from Germany. It crushed forecasts, with strong expectations and current conditions. In contrast, recent U.S. reports have missed: last week’s payrolls and ISM manufacturing/services, then today’s retail sales.
Wednesday’s hot CPI spurred some fears that the Fed will need to hike rates. Traders attempted to drive the euro lower but haven’t been able to get it below the trendline cited above. Buyers may take charge if prices continue to hold these levels.
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Notice the downward-sloping trendline along EURUSD’s highs in early January and late February. The currency pair broke above that resistance last week and is now trying to turn it into support. MACD has also been trending higher for the past month.
Second, compare the weekly chart to price action in 2018. At that time, the euro surged to a new three-year high but was unable to hold its 50-week simple moving average (SMA). This time, however, it bounced at that line:
Finally, consider the economic data -- especially this week’s Zew reading from Germany. It crushed forecasts, with strong expectations and current conditions. In contrast, recent U.S. reports have missed: last week’s payrolls and ISM manufacturing/services, then today’s retail sales.
Wednesday’s hot CPI spurred some fears that the Fed will need to hike rates. Traders attempted to drive the euro lower but haven’t been able to get it below the trendline cited above. Buyers may take charge if prices continue to hold these levels.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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