From
time to time we get opinions from the Trump’s administration that the
strong USD is becoming a huge problem for the American companies and
economy as overall. With those comments, some experts started to doubt
the current interest rises path. This eases the buying pressure on the
USD and creates a mid-term correction movements on many pairs.
On
the EURUSD, the price defended the lower line of the wedge formation
(green lines). Wedge generally suggests that the price will decline in
the long-term but this defence (yellow) gives buyers hope and an
occasion for the mid-term upswing. The closest target for now is 100
pips away (orange, 1.085) and looks very strong. It is a combination of
the horizontal resistance and the long-term down trendline (blue). This
allows us to think that this resistance will be very hard to break.
Long-term
sentiment has to stay negative for a while. We are below all major
resistances so we have no grounds to think that the situation is
different. We can see a bullish potential in the short-term and this is
our base scenario for the next few days/weeks. USD weakness should be
continued but again, later on, higher prices on the EURUSD will be used
by the sellers to push prices lower.
Tomasz Wisniewski
Chief Analyst – Alpari Research & Analysis Limited
http://www.alpari.news
Alpari
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