EURUSD – Euro’s gains likely unsustainable.
This article is originally referred from Orbex Technical Analysis.
The EURUSD currency pair reached fresh highs last week.
The gains came amid a mix of factors. The weaker U.S. dollar helped the common currency to rally.
The weakness in the USD was also renewed after selling sentiment hit the markets after the Treasury Secretary of the U.S., Steven Mnuchin commented that a weaker currency was good for the economy.
The EURUSD reached fresh four-year highs on the news.
The following day, the ECB’s monetary policy did not offer much in terms of policy changes.
However, Mario Draghi’s failure to talk about the exchange rate brought renewed optimism in the euro as it surged higher.
It was a volatile ride as only a few hours later, the U.S. President Trump’s comments, clarifying that Mnuchin’s comments were misinterpreted sent the euro falling amid a modest strengthening of the U.S. dollar.
The EURUSD was seen to be weakening near the top and a modest attempt to retrace the losses on Friday failed.
This came amid the U.S. GDP data showing a 2.6% expansion which was below the market expectations. With the euro closing weaker on Friday, we expect to see further declines coming.
Next week’s FOMC meeting alongside the January jobs report could potentially be a trigger for the common currency.
Technical Analysis on EURUSD
The weekly chart for the EURUSD shows that price has managed to rise above the main resistance level of 1.2300.
However, we expect that in the near term, EURUSD could revisit this level where support could be established.
In such a scenario the bias could once again turn bullish.
The bearish bias comes into the picture on a close below 1.2231 level on a weekly basis.
Original Source: Orbex Technical Analysis