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The EUR/USD has once again accentuated its rise yesterday, continuing the rebound initiated last Thursday after a low of 1.0988, marking a peak at 1.1089
However, several factors suggest that the rise may be over.
Traders are waiting for the concrete in the folder of the negotiations China-USA
It should be remembered that the progress of the Euro since last Thursday is in great part related to an improvement in the risk sentiment of the market, in the face of encouraging statements in regards to the discussions on China-USA, the optimism, reducing the attractiveness of the Dollar as a safe haven.
However, after having greeted vague positive statements, the market begins to get impatient, and would like to see something concrete, with at least the announcement of a date for the signing of the agreement of phase 1 announced last month.
However, these confirmations are slow to be delivered, and the rumors of a deadlock in negotiations to accumulate, even if the official discourse remains that everything goes well and that the dialogue is constructive.
In other words, without fast valid confirmation that the negotiations between China and the United States are proceeding well, the Euro may fall back, at the same time as the market optimism about an agreement between the two largest economic powers of the planet.
The Euro is facing a key resistance, which is blocking the road
In addition, from a technical point of view, the pair EUR/USD is now facing a key resistance zone, made up of the moving average 100 days located at 1.1090 and the psychological threshold of 1.11.
In the current context, there seems to be little chance that the Euro crosses this barrier without the support of a news favourable.
However, if the single currency succeeds, the next area of key resistance would be around 1.1175, a threshold that had halted the rally of the Euro around mid-October and early November, and the current location of the 200-day moving average.
If a correction materializes from current levels, 1.1050 will be the first support to potential, before the zone formed by the lows of last week at 1.0988 and the psychological threshold key 1.10.