EUR/USD Price Speaking FactorsEUR/USD trades to a contemporary 2020 excessive (1.1966) forward of the Federal Open Market Committ
EUR/USD Price Speaking Factors
EUR/USD trades to a contemporary 2020 excessive (1.1966) forward of the Federal Open Market Committee (FOMC) Minutes, and present market situations could maintain the alternate charge afloat as Relative Energy Index (RSI) pushes into overbought territory.
EUR/USD Rally Pushes RSI Into Overbought Zone Forward of FOMC Minutes
EUR/USD is on monitor to mark the longest stretch of positive factors since 2004 after appreciating for eight consecutive weeks, and it stays to be seen if the FOMC Minutes will derail the bullish conduct because the RSI preserves the upward development established in March and climbs above 70 for the fourth time this 12 months.
The intense studying within the RSI is more likely to be accompanied by an additional appreciation in EUR/USD amid the conduct seen in July, and extra of the identical from Chairman Jerome Powell and Co. could maintain the alternate charge afloat because the Federal Reserve seems to be in no rush to change the course for financial coverage.
In flip, the FOMC Minutes could spotlight a dovish ahead steering because the central financial institution vows to “enhance our holdings of Treasury and company mortgage-backed securities at the very least on the present tempo,” and the provisions to the US Greenback liquidity swap traces unveiled in March could proceed to drag on the Buck because the preparations “function an vital liquidity backstop to ease strains in international funding markets.”
On the identical time, it appears as if the crowding conduct within the US Greenback will persist though the FOMC depends on its asset purchases together with its lending services to assist the US economic system as retail merchants have been net-short EUR/USD since mid-Could.
With that mentioned, present market situations could EUR/USD afloat forward of the FOMC Minutes, and the alternate charge seems to be on monitor to check the Could 2018 excessive (1.1996) because the RSI pushes into overbought territory for the fourth time in 2020.
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EUR/USD Price Each day Chart
Supply: Buying and selling View
- Remember, a ‘golden cross’ materialized in EUR/USD in the direction of the tip of June because the 50-Day SMA (1.1502) crossed above the 200-Day SMA (1.1134), with the shifting averages extending the constructive slopes into the second half of the 12 months.
- On the identical time, a bull flag formation panned out following the failed try to shut under the 1.1190 (38.2% retracement) to 1.1220 (78.6% growth) area in July, with the Relative Energy Index (RSI) serving to to validate the continuation sample because the oscillator bounced alongside trendline assist to protect the upward development established in March.
- Latest developments within the RSI recommend the bullish momentum will proceed to collect tempo over the approaching days because the oscillator pushes into overbought territory for the fourth time in 2020, with the excessive studying in the indicator more likely to be accompanied by an additional appreciation in EUR/USD amid the conduct seen in July.
- Want a break/shut above the 1.1960 (38.2% retracement) to 1.1970 (23.6% growth) area to carry the Could 2018 excessive (1.1996) on the radar, with the subsequent space of curiosity coming in round 1.2080 (78.6% retracement) to 1.2140 (50% retracement).
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— Written by David Track, Forex Strategist
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