EUR/USD starts new week near 1.1660
Despite a positive perception of ideas expressed by the US President Donald Trump at the ASEAN summit the Dollar is continuing to lose value against the Euro in a one-week long ascending channel. Although the pattern is supported by the rising 55-, 100- and 200-hour SMAs, the upcoming rebound from the 23.6% Fibonacci retracement level at 1.1679 is likely to lead to breakout to the south. This assumption is additionally backed up by the average market sentiment, which is 63% bearish. Moreover, there is a need to take into account that today there are scheduled no fundamental events that might give the pair an impulse strong enough to bypass the above resistance, which has been managing to turnaround the rate for the last two weeks.
Despite a positive perception of ideas expressed by the US President Donald Trump at the ASEAN summit the Dollar is continuing to lose value against the Euro in a one-week long ascending channel. Although the pattern is supported by the rising 55-, 100- and 200-hour SMAs, the upcoming rebound from the 23.6% Fibonacci retracement level at 1.1679 is likely to lead to breakout to the south. This assumption is additionally backed up by the average market sentiment, which is 63% bearish. Moreover, there is a need to take into account that today there are scheduled no fundamental events that might give the pair an impulse strong enough to bypass the above resistance, which has been managing to turnaround the rate for the last two weeks.
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EUR/USD breaks from three-month channel amid strong German data
Due to release of much better than expected German GDP data the currency exchange rate not only left the junior rising wedge formation but also managed to break through the upper resistance line of a three-month long dominant descending channel.
Generally, the pair is expected to spend some time moving horizontally and then make a turnaround, as the further path to the north is obstructed by combined resistance formed by the 50% Fibonacci retracement level, the monthly R1 and the weekly R3.
This assumption is also supported on daily timeframe, as an area near the 1.1796 mark contains the 50-day SMA. However, the surge might continue if release of the American inflation and retail sales data will not justify expectations.
Due to release of much better than expected German GDP data the currency exchange rate not only left the junior rising wedge formation but also managed to break through the upper resistance line of a three-month long dominant descending channel.
Generally, the pair is expected to spend some time moving horizontally and then make a turnaround, as the further path to the north is obstructed by combined resistance formed by the 50% Fibonacci retracement level, the monthly R1 and the weekly R3.
This assumption is also supported on daily timeframe, as an area near the 1.1796 mark contains the 50-day SMA. However, the surge might continue if release of the American inflation and retail sales data will not justify expectations.
In line with expectations, the common European currency continues to advance against the Dollar in one-week long ascending channel. However, there is a need to notice that yesterday fluctuations of the rate started to narrow down, which indicates on transformation of the current pattern into the rising wedge formation.
Most likely a breakout will happen as soon as the currency rate will hit the 23.6% Fibonacci retracement level located at 1.1679. On the other hand, the rising 55-hour SMA might constrain the exchange rate from rapid falling. However, the above scenario might be altered due to the ECB President Draghi and the Fed Chair Yellen discussion at the Central Bank Communications Conference.