Hey, forex friends! Looks like the euro is on track to extend its gains against the Greenback! What do you think of this setup?
As you can see, the euro has been on a roll against the dollar since the middle of the month, but has since then taken a breather from its gains.
The euro is also one of the more attractive currency to short the dollar against these days. Inflation in the euro region has improved, business and consumer surveys are rockin’ it, and the ECB believes that the “euro area economy is becoming increasingly solid and that downside risks have further diminished.”
And while Draghi and his gang still believe that growth risks are tilted to the downside, they also shared that they “relate predominantly to global factors.” So unless we see more geopolitics-related
tweets threats, the ECB might receive more pressure to ease up the pedal from the metal.
Meanwhile dollar bulls are finding it hard to gain back their mojo after last week’s selloff. In fact, the FOMC meeting minutes not only revealed nothing new this week, but it also barely made an impact on interest rate hike speculations for June.
Of course, talks unwinding the Fed’s balance sheet didn’t help, as its tightening effect put a damper on further rate hikes down the road.
For now, I’m waiting for the pair to break above the bullish pennant, as well as its top WATR, to confirm a continuation of its uptrend. I’m planning on placing my stop just below the pattern and maybe targeting its previous highs near 1.1400 – 1.1500.
What do you think? Will EUR/USD extend its uptrend? Or are the bulls done pushing the common currency higher?
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