Saturday, August 05, 2017

We Can Expect An EUR/USD Correction




The upward EUR/USD rally turned out to be very stable and the EUR broke out above 1.1713 without much effort, reaching the resistance trend line of the channel (in red) at 1.19101.

Despite the attempt to continue rallying and the small breakout above the trend line, I think that the pair will not be able to remain above the high without a correction. The catalyst for the drop was yesterday’s NFP data, which turned out to be more positive than expected.

I think that in the coming week the drop will continue in a corrective manner and it will reach the support trend line of the channel (in red) in the zone around 1.1650 – 1.1580. If the drop continues below that zone it could reach 1.1400.

A breakout to the upside would be a very strong signal for strengthening of the upward trend.


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