Someone said that shorting EUR/USD on forex market is an outdated strategy, this could be true and the Euro-Dollar pair is going to rise to 1.08, bouncing from 1.06 or less with a triple bottom on the chart.
The pattern appears clearly on the weekly time-frame and gives to EUR/USD a bullish perspective in the middle-long term too, but the chart is not the only reason to doubt about the sell on the Euro-Dollar major.
3 reasons why surprises are over on EUR/USD
- The divergency of the monetary policy between the European Central Bank and the Federal Reserve is not longer a news, it’s a process started with the European quantitative easing of Mario Draghi and with the rise of the interest rate in USA by Janet Yellen: the market had already absorbed this divergency and the fall of EUR/USD exchange was already history.
- The economic recovery in the Euro-area is in progress and the European GDP is growing, though with different intensity between the various Country of the Old Continent.
- The macro-economic news are not enough to resume the bearish trend seen with the start of the QE in Euro-area, the rise of EUR/USD is not so fast and many operators keep selling on the tops, but this strategy is losing credibility and white candles have exceeded the number of black candles on the chart.
EUR/USD, technical analysis in middle-long term
On the weekly chart EUR/USD created a triple bottom that could generate a bullish trend in the middle-long term. The 1.0814 technical level is the neck-line to break, beyond that the couple of currencies could explode until the following targets of 1.1144 and 1.1465, a very important resistance from January 2015. On the contrary, a fall under the 1.0516 support could generate a new test in 1.04 area.