During the past three months, the Euro is stranded in an ascending . However, it seems that a breakout is likely to occur soon, as the upper boundary of this pattern has been unreachable for the last week and a half. In addition, the rate has approached the upper boundary of a senior channel circa 4.57 which has bounded the rate since mid-2014. Along the way, the Euro faces a strong resistance of the weekly and monthly R1 at 4.55.
Given the pair’s long-term appreciation, it would not be surprising if this movement continues to prevail. However, it is more likely that a pair retraces from the senior channel just to cool off its high levels.
Contrary to expectations, the Euro continues to appreciate against the Turkish Lira. If looking at the strong appreciation that it apparent on longer-term time-frames, it seems that the movement of this pair is depended more on fundamental events and speculations rather than technical factors.
The pair has been trending in a sharp channel up on the hourly chart. However, the up-trend keeps getting even steeper, thus making it hard to determine a possible area of reversal.
In the short-term, the Euro reversed from the weekly S1 at 4.54 on Thursday and has since surged to the upside. Technical indicators suggest that the rate might still push higher up to the 4.62/63 area and then edge lower towards the aforementioned 4.54 area.
However, as previously mentioned, fundamentals might swiftly change the overall market sentiment and keep pushing the rate even higher.
As apparent on the chart, the Euro continues to appreciate against the Turkish Lira with an increasingly steeper movement. As a result, all previously-drawn channels are constantly breached to the upside.
The Euro is currently trading near the upper boundary of its latest channel up. Technical indicators are located near historical highs; thus, it is likely that the pair initiates a slight correction downwards. A possible target in the short-term could be the 4.58 area.
By and large, it should be noted that this pair depends heavily on fundamental events both in the EU and Turkey. Thus, as long as situation in Turkey remains unstable, the Euro could to continue to edge higher within the following weeks.