Markets have launched the European currency missile! The current sharp appreciation of the Euro against the US dollar looks like the apogee of the growing summer trend.
Elimination of positions in carry trades, the performance by Janet Yellen in Jackson Hole, who did not say anything about raising the Fed's discount rate, and where Mario Draghi did not seem to pay any attention to the expensive euro exchange rate - from all these events, the euro has only become stronger. And, finally, yesterday's surge in the geopolitical situation sent the EUR / USD currency pair's rate above 1.20.
Technically, yesterday's growth looks like a classic sharp impulse, which in terms of technical analysis is able to locally halt the half-year trend of the euro's growth. Most likely, in the near future the euro will not be able to reach the upper border of the growing channel to the price area of 1.23. More logical at the moment will be the correction of the EUR / USD pair towards the 1.18-1.19 area.
Globally, the resistance level for the EUR / USD pair is at around 1.25. This price tag is likely to become the highest goal of the trend, which began in April 2017. The holiday period is over and together with this event, liquidity is returning to the market and volumes are growing with it. Any significant correction in the pair will be regarded as a good opportunity to take a long position in the euro. The market wants very much to see the mark at 1.25, and the lack of news capable of hindering this scenario only strengthens the confidence that this goal is likely to be achieved.
The change in the number of employed in the private sector from ADP will be a harbinger of official data from the Bureau of Labor Statistics. If the statistics are better than expected, this will positively affect the dollar index and a small correction for the EUR / USD pair is more than likely. In general, at these levels, buying the euro against the dollar at the moment looks like a risky operation, and it is better to wait for correction to the levels of 1.18-1.19.
Care: These reviews are a private opinion of ARUM CAPITAL and are provided for information only. In no way can the provided analysis be considered as an action signal, neither is it any sort of investment advice (for the purposes of EU Directive 2004/39/EC). ARUM CAPITAL waives any liability for the trading results which may arise after using these reviews. These materials contain NO warranties or guarantees, either direct or implicit, on the precise, complete or confirmed character of the details they contain.