EURUSD, Daily
The pair made a near 2-year high above the level of 1.1600 after seeing the golden cross 50-SMA signal cut the 200-SMA at the end of June in a bullish flag price continuation pattern. The US Dollar itself and the USDIndex, assets with negative correlation with the EURUSD, this week hit the lowest level after two years in a row at 94.50. Likewise, seeing the death cross at the beginning of the month comes with the price continuation model in the bearish flag downtrend.
The European Union recovery fund is an important step which strengthened the Euro. Meanwhile the US Dollar is beset by all-round problems, including the prolonged tensions with China and the fact that the US holds the record for the highest number of people infected and living from Covid-19. That means the Fed may have to announce new financial measures or policies, which may be even more aggravating to the US Dollar. Up until now, it is expected that this pair may go up to the level of 1.2000.
Technically, the next upward target is seen in the high area at the end of September 2018 at the 1.1800 zone, which is also the 261.8 Fibo (downleg from the June 10 high to June 19 low) .
Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand
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