The EUR/USD pair continues to show mixed signals in the markets, with the past few trading sessions trading in a sideways market. However, today’s bullish push in the markets signals a possible end to the horizontal markets, and a possible start of a new bullish trend, resuming a long-term trend that has seen EUR/USD price rise by 6 per cent since November 5.
The dollar steadied during yesterday’s session, following an upsurge in Monday’s trading session when fears about possible Covid-19 restrictions in China gripped the markets and saw many investors accumulating USD during the session. The session also saw the benchmark 10-year US Treasury bond yield continues to trade sideways, giving leeway to other currencies which gained against the dollar.
One of these currencies that gained against the dollar was the EUR, which went up 0.7 per cent, reversing a streak of two bearish trading sessions. In today’s trading session, the bullish trend seems to be continuing as Eur continues to show strength against the dollar, rising by 0.3 per cent at press time.
However, on the fundamental side of things, the current EUR gain on USD may be temporary, as the Euro region continues to outpace the US in the rate of inflation, rising cost of energy and a slowing economy. Therefore, the USD is looking more bullish for the long term, and we might see it making gains against the Eur.
On the technical side of things, I expect the next few trading sessions to continue being bullish for the EUR/USD pair. There is a high likelihood we might see the EUR/USD price breaking the monthly price high of $1.059, possibly hitting and trading above the $1.01 resistance level before the end of the month. However, a trade below yesterday’s opening price of $1.024 will invalidate my analysis and possibly point to the end of the current bullish push.
This post was last modified on Nov 23, 2022, 10:35 GMT 10:35