USD/CAD has made an immense move to the downside on Tuesday falling by about 200 pips.
EUR/USD: bullish intentions
Information is not investment advice
On Monday, the EUR/USD broke through the resistance of the MAs and established itself at a new local base above the support of 1.0905. The first week of May and the middle of April were the two last periods when this currency pair was at these heights. Extrapolating a symmetrical wavy shape of the chart, we may assume that the price will take another step to approach the resistance of 1.0988 and then will bounce back forming the tip of the third wave. Technically, that is possible. Practically, it will depend on the fundamental input because it was exactly a fundamental factor that led to the current uptrend in the first place.
Even if it hasn’t been plunging straightaway against the US dollar, the EUR has been depressive lately, both in the midterm and in the longterm – the 100-MA and 200-MA confirm that. Increased volatility may blur the picture, but this is what we have the MAs for. The fundamental reason for the weakness of the EUR is the one which became clear exactly in the course of the fight against the virus: the European Union does have obstacles in the way of its economic unity. However, the last announcement we received from the EU is countering that impression: the German Chancellor and the French President agree on a $546-bln aid package for the EU recovery. That is already a breakthrough, because it is not too often that we see that these two core European states agree on something. Therefore, in this proposal the spirit of the Union reveals itself in the clearest manner, supporting the EUR and launching it into a new upward trajectory. However, the gravity forces of the reality will not hesitate to check this intention for resilience: there are other 27 EU member states that need to agree on this proposal, and this will likely be a problem – waiting for the EUR/USD at 1.0988.
Last week NZD/USD once again met resistance in the 0.6155 area. As you can see from the chart, this area stopped the pair twice before within the recent month.
It’s worth paying attention to AUD/JPY. The pair has approached the resistance line connecting April and May highs.
Has the US dollar lost a top position forever?
We know that hammer formation may be effective in identifying trend reversals. Let's study it a bit closer to see real-life cases.
CAD will get fresh volatility after BOC statement on June 3 at 17:00 MT time.