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EUR / USD: trend channel recaptured – UBS column

Review: The EUR / USD currency pair rose sharply from the end of May to the beginning of September and reached USD 1,200 on September 1st. Then EUR / USD initiated a downward correction, which was presumably also driven behind the scenes by the ECB. After the strong rise of the euro, ECB representatives expressed criticism several times about the high valuation of the common currency. EUR / USD also fell out of the trend channel and below the 50’s EMA, reaching its low of USD 1,161 on September 25th. Then the bulls returned to the field and drove EUR / USD back above the 50’s EMA and subsequently also regained the rising trend channel. The 50 EMA could also be defended several times in the case of short declines. EUR / USD continues to show strength!

Outlook: As long as the currency pair is quoted in the rising trend channel and can defend the 50 EMA, the EUR / USD can be expected to continue to rise.

The long scenarios: EUR / USD remains in the rising trend channel and is gaining more and more upward momentum. The first starting point would be the high of October 1st at USD 1,180. If it goes higher, the upper limit of the rising trend channel should be approached in the area of ​​USD 1,200. However, an upward break out of the rising trend channel is not likely. Especially since the ECB should counteract an overheating of the euro.

The short scenarios: EUR / USD sags again and gives up the rising trend channel that has just been recaptured. As a result, the bears should then set course for the 50 EMA. If a downward breakthrough is achieved here, the situation would deteriorate again in the short term and a further decline can be expected. The next target for the bears would then be the September 25 low of USD 1,161. Below that, the bears should head for the USD 1,142 support.

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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