SusanaP
Member
Cash: $ 3.45
Posts: 17
Joined: 21 May 2018
Location: Managua
|
| EUR/USD the euro’s bearish trend remains strong |
 |
|
Last week, all the major currencies expect for the Swiss franc declined against the US dollar. The single currency was the biggest loser, shedding -1.42%.
On Friday, the euro dropped to 1.1750 against the greenback after an unsuccessful attempt at exiting the triangle. The price reversed downwards after news from Italy that two parties (The League and The Five Star Movement) have pledged to roll back austerity measures and increase spending as part of their coalition agreement. Long-term Italian bond yields shot up on this news to reach a 7-month high.
These geopolitical developments caused the EURUSD pair and US10Y bond yields to move in the same direction. Usually, when US10Y bond yields decline, the US dollar is supposed to drop, while the euro should rise.
My expectations of an upwards correction to 1.2859 proved correct. After a false breakout of the triangular formation, the rate dropped to the reversal zone of 1.1778 – 1.1796.
The euro has been declining against the dollar for 22 consecutive days, without any significant pullbacks. I haven’t bothered to make a prediction for today given that the situation in Italy is keeping the euro under pressure and the price has reached the key daily support level of 1.1740. In today’s Asian session, the euro has dropped to 1.1744.
The exchange rate has gained a foothold at the junction between the 180th and 67th degrees from different highs. The 90th degree is sitting at 1.1728, while the 112th degree is at 1.1701.
I’ve copied the upper line of the triangle and pasted it at the 1.1763 low to form the downwards A-A channel, which will help us determine the target for sellers along with the Gann lines. For now, the 112th degree is the target for sellers along the lower line of the A-A channel, while the 45th degree at 1.1777 is the target for buyers along the channel’s upper line.
I’ve also drawn another line, which runs through the lows of 1.1822 (9th of May) and 1.1763 (16th of May). This is here to help identify intermediate support levels. The intersection between this line and the 67th degree is a potential reversal level. I’m not ready to short the euro yet, though. Today, I’m taking a wait-and-see attitude.
You can see 1 usd to eur, you can use to convert.
|
