EURUSD Trades Higher on USD Weakness and as Italy Maintains Credit Rating

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Written By: Angeline Feliciano
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    Summary:
  • EURUSD is trading higher in today's Asian session on the back of USD weakness and as risk appetite picks up, eyeing trend line resistance.

EURUSD is trading higher in today’s trading on the back of dollar weakness and as Italy maintained its credit rating. As of this writing, the currency pair is up by 0.15% at 1.0840.

Earlier today, the BOJ announced that it would buy unlimited amounts of Japanese government bonds. There was no rate cut nor any excessive easing measures. Consequently, the Japanese yen strengthened at the expense of the US dollar. The weakness on USDJPY seems to have spilled over to the other major currencies too.

It may also help EURUSD that risk appetite is slightly higher in today’s trading. It could be brought about by talks of economies reopening as well as the S&P affirming Italy’s credit rating at BBB. Prior to the announcement last Friday, there were speculations that the country’s credit rating would  be downgraded.

There are no top-tier reports due for EURUSD today. However, the much-anticipated ECB rate decision is scheduled on Wednesday.

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EURUSD Outlook

On the 1-hour time frame, we can see that EURUSD has made higher lows after a series of lower lows. Consequently, an inverse head and shoulders chart pattern has formed. This is a bullish reversal indicator and with the currency pair trading well above its neckline resistance, it suggests that EURUSD has bullish momentum.

If this assumption proves to be true, the currency pair could rally all the way up to 1.0880. This price served as a resistance level on April 20 to 22. Additionally, on the 4-hour time frame, this price corresponds to the falling trend line when you connect the highs of March 27 and April 15. If the currency pair breaks this resistance level, the next ceiling could be at 1.0990 where it peaked on April 15.

However, be wary of a close below today’s Asian session lows at 1.0810. This could mean that there are still sellers in the market who could push EURUSD to Friday’s lows at 1.0726.

Written By: Angeline Feliciano

Angeline Feliciano has been trading Forex for over ten years. She has invaluable experience working in FX education companies like BabyPips.com and Learn to Trade as a trader, currency analyst, trading coach, and presenter. Aside from these roles, she has also created intensive educational content on fundamental analysis which is heavily sought after by retail traders. She has taught hundreds of people how to trade the FX market in the Philippines and in Australia. When she is not trading, you can find her in the gym lifting weights.

Published by
Written By: Angeline Feliciano