© O Financista. The Euro’s rebound is sustainable
The EUR/USD pair bounced on Friday, with a recent peak at 1.1180, cancelling more than half of the decline posted throughout the week, in the face of a Dollar in sharp decline against most of the currencies forex.
The fall of the Dollar has started as of this morning, no doubt in part because of profit-taking after a week of rising (and, therefore, declines for EUR/USD), but statistics in the united states have clearly accentuated the movement in the afternoon.
The PMI index of Chicago has indeed posted to 54.2 points versus 55.1 expected, while the index of consumer confidence according to the University of Michigan is down 100 points from 102 points in advance.
Beyond these statistics, it should be noted that the Dollar’s decline is also related to the idea of more widespread that the Fed will cut rates this year, expectations are clearly visible in the money markets.
JP Morgan, for example, has released today explaining that the bank is anticipating that the Fed will lower its rates in September and December this year, as it was believed previously that there was as much chance of lowering that rate increase.
The misfortune of the Dollar is therefore the happiness of the EUR/USD pair this Friday, and a graphical point of view, the rebound of the day start to worry about the vendors, though confirmations are still needed.
The EUR/USD is testing, in fact, currently its moving averages 100 and 200 hours at 1..157, and 1.1164, as well as the retracement of 50% of the decline this week.
If a break above this area is confirmed, the negative trend will begin to be questioned, and attention could then turn to the psychological threshold of 1.12, then the high of Monday at 1.1215, before 1.1225, 1.1265 and 1.13.
If this threshold is an obstacle, the rising day will become a sales opportunity. In this case, 1.1140 will be the first support potential target before the zone of 1.1100-15 where is the low annual (1.1106), and then directly to the psychological threshold key 1.10.
