EUR USD Technical Analysis | EUR USD Trading: 2017-07-20 | IFCM
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EUR USD Technical Analysis - EUR USD Trading: 2017-07-20

Expected ECB tapering is bullish for euro

Expected start of reduction in ECB stimulus measures is bullish for euro. Will the euro continue the rise against the greenback?

Today the European Central Bank meets and the ECB President Mario Draghi is expected to signal the central bank is considering tapering its monthly €60 billion asset purchase program in coming months as euro-zone economy has improved. Recent inflation report confirmed final June headline inflation below 2% target rate and at initial reading of 1.3%, third monthly decline in a row. Even if the ECB refrains from hinting it prepares to reduce stimulus measures soon, the US dollar has been weakening since Fed chair Yellen’s dovish semi-annual testimony and weak June retail sales and inflation reports. Expectations of reduced stimulus in coming months is bullish for euro.

EURUSD

On the daily timeframe EUR/USD has been trading higher since the start of the year. The price is above the 50-day moving average MA(50) which is rising.

We believe the bullish momentum will continue after the price closes above the upper Donchian boundary at 1.1581, It can be used as an entry point for a pending order to buy. The stop loss can be placed below the last fractal low at 1.1368, confirmed also by last fractal low. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.1581) without reaching the order (1.1368) we recommend cancelling the position: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

PositionBuy
Buy stop Above 1.1581
Stop loss Below 1.1368

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This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

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