EURUSD: downwards correction starting from 1.1349

On Tuesday the 23rd of June, trading on the euro closed up once again. The bulls managed to bring the rate up to 1.1349, completely recovering their losses from last week. Trading closed at 1.1307, recording a 0.42% gain on the previous day. The euro crosses favoured the bulls throughout the day’s trading.

The euro surged to a new weekly high following positive economic data as well as a clarification from White House trade advisor Peter Navarro that the US-China trade deal is still on. Larry Kudlow, another presidential advisor, later added that the US-China trade deal remains unchanged. US President Donald Trump calmed investors via Twitter, stating that the trade deal is still in force and that he hopes the conditions will continue to be fulfilled.

Day’s news (GMT+3):

  • 11:00 Germany: IFO - business climate (Jun), IFO - expectations (Jun), IFO - current assessment (Jun).
  • 17:30 US: EIA crude oil stocks change (19 Jun).
  • 22:30 US: FOMC member Bullard’s speech.
1

Current situation:

Amid the bullish fundamentals, the pair jumped to the U3 MA line. No one expected the rate to approach 1.1350 so quickly. The weekly target has been reached after just 2 days.

The MA line is looking up. The U3 line is a strong resistance. Now a downward correction is starting to take place from 1.1349. Considering that the major euro crosses are trading up, we expect the EURUSD pair to drop to the balance line at 1.1280.

The bears are currently trying to break through the trend line drawn from the 1.1169 low. As soon as the pair reaches the balance line, we should look out for a bounce and keep an eye on the movements of the crosses. If the bulls manage to stay active, there may be some sense in entering some short-term long positions.

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