Good day forex friends! On my post last July 8 (kindly see it here), I questioned whether the EURUSD‘s recent success will be shortlived since it was approaching a significant technical resistance at that time. Back then, it already broke out from a mini inverted head and shoulders formation but still it remained below the longer term downtrend. But based on its present daily chart, you can see that it has just moved past the long term downtrend resistance – finally, a sign of better things to come for the euro bulls! Haay! In any case, the pair could still range or even retrace for awhile given its overbought conditions. If it weakens, the former neckline of the inverted head and shoulders should serve as a support to keep it from falling further. A move to the upside, on the other hand, could send it back up until it encounters some selling pressure at around 1.3250. And as I’ve said, things are looking better now for the euro bulls which means that the euro, at of this moment, has a higher chance of moving north compared to before. Long on weakness anyone?
No major economic events are due in the euro zone up until Thursday (July 22). On that day, the recent manufacturing and service PMIs of France, Germany, and the euro zone itself are all seen to dipped slightly from their last readings. The euro zone’s industrial new orders are also projected to have slipped by 0.1% for the month after logging a gain of 0.6% during the previous period. On Friday (July 23), the German Ifo Business Climate is likewise anticipated to have declined to 101.5 from 101.8. These projections, if they are indeed true, could soften the euro’s climb. Any positive surprise from these, on the flip side, could send the EUR higher.