EUR/USD: bullish week
This week EUR/USD soared from the 2013 lows at $1.2750 to $1.3200, supported by the dovish US FOMC meeting minutes and Bernanke’s comments. By the end of the week the pair edged lower to $1.3080, but is still in process of forming a weekly “bullish engulfing” candle.
We still expect the pair to resume its slide from $1.3700 after the current correction. However, a weekly close above the $1.3000 mark could open the way for a higher upward move that will be capped below $1.3380. Weekly close below $1.3000 would be a selling signal.
According to Westpac strategists, next week EUR/USD may see $1.3300/1.3400 given strong odds Bernanke repeats a dovish tone at next week’s semi annual testimony. However, they prefer standing aside and selling the pair on rallies towards $1.3400. Meanwhile, Barclays strategists entered a new EUR/USD short at $1.3066 with a stop at $1.3275 and a target of $1.2700.
Chart. Weekly EUR/USD