Wednesday, 24 January 2018

EUR / USD - rally continues

Posted by Olga Gorinina at 15:56 Labels: , ,




The European currency remains more attractive to investors than the US dollar. Even the resumption of government funding yesterday did not help the dollar at least stay at current levels. Maybe some fears that this situation will be come back already in early February, force investors to get rid of the US currency, since the Senate is still far from agreeing on the budget for 2018.
At the same time, only positive news is coming from the EU. The beginning of negotiations on the creation of a "big coalition" of the PSD and CDU / CSU gives hope to investors that the political crisis in Germany will be resolved. Released yesterday, data on economic sentiment from ZEW surpassed market expectations. However, the statistics published today were rather neutral. PMI of the German manufacturing sector came in at 61.2 with a forecast of 63.2, and this indicator for the services sector exceeded the forecast level of 55.6 and was 57.0. The same situation is with the PMI in the EU, the indicator characterizing the manufacturing sector turned out to be less than the forecast, 59.6 versus 60.4, while the PMI of the services sector outperformed expectations 57.6 against 56.5. The pair reacted to these figures by the gain to the area of ​​1.2355 and further 1.2363. However, it is very likely that this upward impulse was made to achieve better positions with the goal of fixing profits on the eve of the ECB meeting, therefore, during the remaining time we can observe a moderate decline in the currency pair.
The chart retains the bullish trend, and the current situation has to continue to move up, as the bulls managed to gain a foothold above the mark of 1.2300. However, buying a currency pair is already late; we can only wait for the reversal signals, which at the time of writing has not yet been obserrved. We'll get it only if the price falls below 1.2335, which can be a good intraday reversal signal.
Our recommendations: consider buying as a price drop in the area of ​​1.2300

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