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Abstract:Barring any “verbal intervention” by European Central Bank members, 1.2413 seems to be a reasonable upside target.
The Euro rose to its highest level in more than two years as optimism continued to build. Early Wednesday, strong Euro Zone survey figures and hopes of progress on Brexit negotiations helped push the Euro above $1.22 against the U.S. Dollar on Wednesday for the first time since April 2018.
At 13:45 GMT, the EUR/USD is at 1.2191, up 0.0036 or +0.29%.
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The Euro has risen nearly 13% since the European Union announced a recovery fund in May. Stronger economic activity data in recent months have also boosted bets that Europe is likely to outperform the United States in the coming months.
Those expectations got a further boost with manufacturing survey data from Germany and France indicating that Europes biggest economies may be recovering quickly.
Investors are also keeping an eye on the outcome of a two-day Federal Reserve policy meeting on Wednesday. Policymakers are expected to keep the U.S. overnight interest rate near zero and signal it will stay there for years to come, a decision that should further boost risk sentiment.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out the previous main top at 1.2178 earlier in the session. The main trend will change to down if sellers take out 1.2059.
The minor range is 1.2059 to 1.2212. Its 50% level at 1.2135 is support.
If the trend changes to down then the retracement zone at 1.2006 to 1.1957 will become the next major downside target.
[fx-article-ad]Daily Swing Chart Technical Forecast
A trade through the intraday high at 1.2212 will reaffirm the uptrend. This would keep the EUR/USD on course for an eventual challenge of the April 17, 2018 main top at 1.2413.
Barring any “verbal intervention” by European Central Bank members, this seems to be a reasonable upside target since there is no visible resistance to stop the rally.
However, even the longs have to be aware of a possible closing price reversal top at each new high along the way. This pattern isnt always triggered by resistance, and most often by a shift in investor sentiment.
For a look at all of todays economic events, check out our economic calendar.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.