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Technical Outlook EUR/USD


Today we are going to analyze the EUR/USD for a longer period of time, in order to get a broader view of the major currency pair.

Over the last few months the euro has been recovering against the US dollar, but recently the bullish momentum has slowed down.
But could the current rally be compromised?

Weekly Time Frame EUR/USD

On the weekly chart, we can see that the price continues to be supported relatively well by the 50-period EMA, although it continues to struggle to break above the recent highs reached this year.

EUR/USD, Weekly time frame chart. Source: xStation 5

Dollar Index – Weekly Time Frame

On the other hand, when we look at the dollar index chart, we can see that there is room for further declines in the USD. Above all, when we identify the chart pattern – head and shoulders which could support further declines if the price breaks below the neckline of the pattern.
Furthermore, the improvement in market sentiment also supports this bearish  USD scenario.

USD index, Weekly time frame chart. Source: xStation 5

AUD leads the gains this morning.

Heatmap. Source: xStation 5

Henrique Tomé, XTB Portugal

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