Euro Forecast: EUR/USD on Cusp of Testing November High
EUR/USD is on the cusp of testing the November high (1.0937) as it pushes above the opening range for March.
Written by
David Song
Strategist
Euro Outlook: EUR/USD
EUR/USD climbs to a fresh monthly high (1.0931) to keep the Relative Strength Index (RSI) in overbought territory, with the exchange rate on the cusp of testing the November high (1.0937) as it pushes above the opening range for March.
Euro Forecast: EUR/USD on Cusp of Testing November High
EUR/USD seems to be reestablishing the advance from the start of the month as authorities in Europe plan to increase public spending, and a potential change in fiscal policy may encourage the European Central Bank (ECB) to wind down its rate-cutting cycle as it boosts the outlook for growth.
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As a result, the Governing Council may adopt a wait-and-see approach as the ongoing shift in US trade policy clouds the outlook for the global economy, and developments coming out of the Euro Area may keep EUR/USD afloat ECB President Christine Lagarde acknowledges that ‘fiscal and structural policies should make the economy more productive, competitive and resilient.’
With that said, the rise in EUR/USD may persist as the RSI still holds above 70, but the exchange rate may consolidate over the coming days if it struggles to test the November high (1.0937).
EUR/USD Chart – Daily
Chart Prepared by David Song, Senior Strategist; EUR/USD on TradingView
- EUR/USD pushes above the opening range for March to approach the November high (1.0937), with a break/close above 1.0940 (50% Fibonacci retracement) opening up the 1.1070 (23.6% Fibonacci retracement) to 1.1090 (38.2% Fibonacci extension) zone.
- Next area of interest comes in around the October high (1.1144), but lack of momentum to push above the November high (1.0937) may curb the recent advance in EUR/USD.
- Need a close below the 1.0830 (23.6% Fibonacci extension) to 1.0880 (23.6% Fibonacci extension) region to bring 1.0760 (38.2% Fibonacci extension) back on the radar, with the next area of interest coming in around 1.0660 (61.8% Fibonacci extension) to 1.0710 (50% Fibonacci extension).
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--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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