July 9 , 2018
As we have mentioned in our previous report that the current buying is just a correction or trend reversal signal. Well pair has crossed all the minor EMA lines and sustaining above these line with the daily closing. This time bulls did not commit any mistake and they snatched the bite from bear’s mouth. Well it is very early to say that potential rounding bottom pattern is in process of formation but yes it will confirm once it trades and settles above 1.1850 level in short term.
If the bulls can maintain the same bullish momentum in the current week then the targets to the upside are likely located near the 1.1854 i.e. the 38.2% Fibonacci retracement from the mid-April-May bear move. Odds are in favor of bulls. We will keep our bias as bullish on the pair as long as 1.1600 level remains.
Mario Draghi’s focus on growth and comparatively mild emphasis on the strong euro is seen as an endorsement to the EUR rising. The Euro has increasingly become a funding currency, amongst others because rates are so low, speculators are borrowing in euros to buy higher yielding assets. In a risk off event, those speculators might have to reduce their bets and, as part of that, buy back the euro. The euro may be a diversifier for those concerned about risk assets.
The short term to intermediate term trend is still down so in a downtrend market long term traders are advised to keep your sell position however; intraday traders are suggested that go for long with a strict stop loss. A bullish crossover on MACD indicator is favoring the bulls and providing us bullish signal for the time being. On contrary RSI arrived in the positive territory i.e. above 50 level, which indicates is supporting the bulls. The 1.1850 level is immediate resistance level followed by 1.2000 whereas 1.1650 level is strong key support level followed by 1.1500 level.