EUR/USD Euro/US Dollar The most traded currency pair in the world, represents how many dollars one can get for a euro. As of this writing, it hovers just above 1.1320. This amount represents a huge milestone. Conclusions First, the EUR/USD pair remains firmly above all its moving averages, indicating a very strong upward trend. The pair has proven a remarkable comeback. It has managed to stay above the 1.1300 level for the past three days, despite the current political and fiscal turmoil that continues to plague the US Dollar.
As of the 3 most recent trading sessions, the 20 Simple Moving Average (SMA) of EUR/USD is showing bullish momentum. Upward momentum is developing while the 100 and 200 SMAs are still directionally flat. These long-term moving averages are a good distance below current trading levels. A major technical breakthrough is just around the corner. The 100 SMA is poised to cross above the 200 SMA, indicating that a longer-term bullish run could take place for this currency pair.
EUR/USD traded as high as 1.1360 during the European trading session, reinforcing the recent bullish trend developing in the currency pair. US Dollar We argue that the US Dollar is still weak for structural reasons, primarily driven by continued political and fiscal dysfunction in the United States. This weakness is further depressing Eurozone market sentiment and boosting the Euro relative to the Dollar.
These are clearly favorable conditions, but EUR/USD is going to need new impetus to push higher. Immediate support comes at 1.1275, strengthened by the horizontal 20 SMA. This support carries a protective barrier for traders hoping to take advantage of bullish short-term momentum.
According to the recent price action, the near-term risk for EUR/USD skews to the upside. Nonetheless, traders ought not get too carried away as the bullish EUR/USD trend has been countered by a loss of momentum. Bullish sentiment has taken hold in the market. Gamechangers are waiting in the wings that may shape the fiscal playing field, particularly those impacting US fiscal policy.