EUR / USD: pullback through? – UBS column

Review: The EUR / USD currency pair started a strong upward trend at the end of May and was able to end the long-term downward trend that had existed since 2018. EUR / USD rose rapidly, with the upward trend leveling off significantly from the end of July. The high of this upward movement was marked on September 1st at USD 1,201. As a result, the currency pair moved sideways for a while and failed to make a sustained rise above its 10-EMA. This was already a first hidden signal of further impending weakness in EUR / USD. Especially since the ECB announced several times that it was concerned about the strong euro and that corresponding measures were also to be expected from the central bank. EUR / USD then fell out of the trend channel and hit USD 1,161 at its low on September 25. This was followed by a pullback to the lower limit of the trend channel.

Outlook: The pullback to the lower limit of the old rising trend channel should now have been completed.

The short scenarios: The currency pair is already showing itself to be weaker again and so far cannot again rise sustainably above the 10-EMA, which means that further price weakness is to be expected. If the EUR / USD slides again below the 50’s EMA at USD 1.1701, the situation would deteriorate further and a decline in EUR / USD to the support at USD 1.1402 would be expected. The 200 EMA at USD 1,138 is currently running just below that, which should also stop the bears. Should there be a breakthrough below the 200 EMA, the situation for EUR / USD would also deteriorate in the long term and a return to the USD 1,100 mark would be likely.

The long scenarios: EUR / USD can stay above the 50’s EMA and regain the rising trend channel. In this case, a further run-up to the course high at USD 1,176 and the resistance area at USD 1,188 / 1,190 could be expected.

Disclaimer: The text is a column of the UBS. 4investors is not responsible for the content of the column and therefore does not necessarily have to agree with the opinion of the 4investors editorial team. Any liability and claims are therefore expressly excluded by 4investors!

At a glance – chart and news: dollar currency


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