EUR/USD Technical Update: How to Trade the Current Upward Trend

EUR/USD

Prediction: Increase

The EUR/USD price is still in a strong upward trend, despite some short-term adjustments after reaching the peak of $1.1390. Recent highs and lows are progressively higher, indicating that the upward trend is still dominant. However, the resistance at $1.1390 is creating pressure, and a slight correction may occur if the price fails to break through this level. Investors need to monitor key support and resistance levels to make informed trading decisions.

FUNDAMENTAL ANALYSIS

Monetary Policy and Fed Impact:

Comments from Raphael Bostic, President of the Federal Reserve Bank of Atlanta, have added uncertainty regarding the Fed's interest rate policy. He stated that the U.S. economy is currently in a "pause" phase and the labor market remains tight, making interest rate cuts by the Fed unlikely in the short term.

However, the Fed’s outlook also suggests a potential policy adjustment in the long term, with forecasts for rate cuts later this year due to factors related to tax policies and global growth.

Global Economic Situation:

Global trade conditions and U.S. tax policies continue to have a significant impact on the U.S. dollar. The uncertainties from trade wars and decisions related to tariffs on imported goods could lead to a depreciation of the U.S. dollar, thereby supporting the price of gold.

Economic growth in China is facing challenges, with UBS lowering its GDP growth forecast for China to 3.4% in 2025. This raises concerns about global growth prospects, making gold a safe-haven asset.

U.S. Dollar Value:

The U.S. dollar continues to weaken, especially against the EUR and other major currencies, amid concerns about a potential economic recession and uncertainty surrounding U.S. tax policies. The dollar is also facing weakening due to investor withdrawals from U.S. assets, leading to a decline in the strength of the greenback.

TECHNICAL ANALYSIS

Key Resistance Levels

●       $1.1390: The nearest strong resistance level. If the price breaks this level, it could move toward higher levels like $1.1474.

●       $1.1320: The next resistance level.

Key Support Levels 

●       $1.0890: The current strong support zone. If the price stays above this level, the upward trend could continue.

●       $1.0850: A firmer support zone.

Technical Indicators:

The current RSI is 67.93, near the overbought region, indicating a possible slight correction before the upward trend continues. However, the RSI hasn't reached overbought conditions (80), so the upward trend may still persist.

The 34 EMA is above the 89 EMA, signaling that the upward trend remains strong. The dynamic support zone around $1.0890 continues to support the upward trend.

Trading volume remains high, suggesting significant investor interest in EUR/USD. If volume drops sharply in the upcoming sessions, a deeper correction may occur.

Price Action:

●       Wait for price reactions at key support and resistance levels, such as $1.0890 (support) and $1.1390 (resistance). If the price recovers from the support zone, a buying opportunity with a target of $1.1390 can be considered. If the price breaks support levels, monitor lower levels to find a reasonable entry point for selling.

EUR/USD is still in an upward trend with clear support and resistance levels. However, fundamental factors such as tax policies and trade war uncertainties could cause short-term corrections. Investors need to closely follow technical indicators and economic news for a suitable trading strategy.

 

 

 

 

 

 

 

 

 

Disclaimer

Derivative investments involve significant risks that may result in the loss of your invested capital. You are advised to carefully read and study the legality of the company, products, and trading rules before deciding to invest your money. Be responsible and accountable in your trading.

 

RISK WARNING IN TRADING

Transactions via margin involve leverage mechanisms, have high risks, and may not be suitable for all investors. THERE IS NO GUARANTEE OF PROFIT on your investment, so be cautious of those who promise profits in trading. It's recommended not to use funds if you're not ready to incur losses. Before deciding to trade, make sure you understand the risks involved and also consider your experience.