EUR/USD jumps above 1.1600; dollar weakness continues

EUR/USD traded positive on Tuesday, and it is moving with gains for the sixth green day in a row as the dollar is losing grip amid Donald Trump recent comments and market optimism that Europe will not have a contagion from the Turkish crisis.

EUR/USD is trading 0.06% positive on Wednesday at 1.1680 after testing the 1.1600 level on Tuesday. The EUR/USD is consolidating a 680 pips gain from August 15 bottom at 1.1300. The pair crossed above the 20-day moving average at 1.1540 on Tuesday and it is now testing the 50-day MA at 1.1615.

EURUSD daily chart August 21

EURUSD daily chart August 21

Technical conditions for the EUR/USD are improving quickly with the MACD showing a turn in the trend, favoring the upside, while the RSI showing the short-term gain is solid. On the other hand, moving averages are still pointing to the south.

As a play for bears, FXStreet analyst Ross Burland makes a case for the bearish Euro. “First of all, speculative accounts are not especially short EUR, but data from the CFTC Friday did show speculative accounts are effectively the least bullish on the single currency in more than a year. It took a few months for traders to figure the euro wasn’t going any higher than 1.1780 and longs pared back positions which equated to a drop right back to 1.1400 when the gravy train came out on the Turkish currency crisis headlines with Trump throwing their currency under the proverbial bus. That fear of contagion is less, but it has not gone away altogether.”

As per prices, if the pair consolidates levels above the 1.1600, it will find immediate resistance at 1.1615 and then at the critical 1.1750. Above there, selling zones are identified at 1.1850 and 1.1920.

To the downside, a rejection of the 50-day moving average at 1.1615 will launch the pair to the 1.1500 area. Below there, buying zones are at 1.1300 and 1.1280.

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