EUR/USD about to re-capture 1.1000 – 1.1200 to come?

May 22, 2020

By Admiral Markets

Source: Economic Events May 22, 2020 – Admiral Markets’ Forex Calendar

While the economic calendar is quite thin for the weekly close, and market participants may expect forex volatility to be subdued in expectation of the upcoming US bank holiday next Monday, the EUR/USD faces an extremely interesting short-term resistance zone around 1.1000.

In fact, a break higher, with a dynamic stint and quick follow through as high as 1.1200, became likely over the last few days. Because, on Monday, Germany and France’s Merkel and Macron proposed a 500 billion EU recovery fund that would offer grants to the European Union regions and sectors hit hardest by the coronavirus pandemic.

Indeed, one could see this as a first step towards a transfer union and in addition with the massive monetary stimulus from the ECB, recent Euro bullishness with further gains comes with no big surprise.

In addition to that, we see the US dollar staying under consistent pressure, and while we expect European yields to continue to rise, a sustainable drop in 10-year US Treasury yields below 0.60% is likely, too, resulting in a further narrowing of the yield differential between EU and US bonds, favouring gains in the EUR/USD.


Free Reports:

Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter





Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.





Technically, a break above 1.1000 coincides with a break out of the trading range between 1.0750/0800 and 1.1000 since the beginning of April, resulting in a projected target on the upside around 1.1200/1250:

Source: Admiral Markets MT5 with MT5-SE Add-on EUR/USD Daily chart (between March 22, 2019, to May 21, 2020). Accessed: May 21, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the EUR/USD fell by 10.2%, in 2016 it fell by 3.2%, in 2017, it increased by 13.92%, 2018, it fell by 4.4%, 2019, it fell by 2.2%, meaning that after five years, it was down by 7.3%.

Discover the world’s #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.

Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.

By Admiral Markets

InvestMacro

InvestMacro is a finance website dedicated to helping investors make better informed decisions through educational content and products