Good evening Forex Kings,
Markets are moving rapidly this evening. Earlier this afternoon the USD strengthen dramatically which may have been a short squeeze on the USD. The USD has now reversed all gains testing a key level on a bear flag formation.
We remain bearish on the USD for technical reasons below:
The USD Index has a large BEAR flag structure, a break below 100 could open the doors to 98 and possibly 96 over the longer term.
Early hours tomorrow morning the FOMC provide their latest minutes. Whilst the minutes will not provide any major shocks, it will give us a further indication into the FEDs ammunition to combat the corona-virus down turn.
In the EU breaking news today suggested the Eurogroup (European financial ministers) failed to agree on a coordinated virus response. They are set to resume their meeting tomorrow which could bring fresh hopes to an agreement. The EUR dropped initially across the board, however the EUR has now erased those losses and we remain bullish on the outlook against the USD.
EURUSD – Technical Analysis
The EURUSD pulled back towards the 38.2% FIB retracement and is now retesting the top of the negative trend line. Our target remains at the 1.1020 level (161.8% FIB extension).
Trade setup: BUY STOP – entry price 1.0895, stop loss 1.0845 and take profit 1.1020
Stop loss: 50 PIPS
Take Profit: 125 PIPS