From the daily technical standpoint, EURO’s resiliency is unmatched presently. The weekly bearish outside range left two weeks ago on the back of Emmanuel Macron’s France presidential victory was a classic bear trap. What next? A glimpse at 22-26 May EURUSD weekly technical outlook for possible scenario
20 May, AtoZForex –The EURO was unarguably the crown king of the currencies market this past week. A very strong unimaginable victory which saw the U.S dollar battered both right, left and center. A technical knock-out was seen at the end of the trading week and the U.S dollar was taken out for medical attention. The EURO which has been suppressed for so so long due to geopolitical risks in the region, finally got a breathing space and the right to express itself freely on the back of sound fundamentals and of course minimal geopolitical risks. The past week saw the EURO rising to its strongest levels in 6 months. The rally, however, leaves no much room for a retracement.
Albeit, a retracement was seen on Thursday, but it was indeed a pull back to reinforce as the spot had a stronger close on Friday. Also, the gap up from 1.0729 to 1.0880 remain unfilled, there’s perhaps no need banking on the close as explained in our previous piece 16 May EURUSD daily technical outlook. Going forward, there’s really no reason to push for the bear side. However, there are so much reason to buy this pair on dips. Data report this past week have been a hit back to back – German investor confidence rose strongly in the month of May, the Eurozone’s trade surplus hit a 3 month high and there were no revisions to the French CPI and Eurozone’s Q1 GDP reports. The fundamentals are so sound that even ECB President Mario Draghi had to acknowledge recovery as being broad-based and resilient. Going into the new trading week, two important data reports (the German IFO report and May PMIs) are scheduled for release.
22-26 May EURUSD weekly technical outlook; Daily Chart
From the daily technical standpoint, EURO’s resiliency is unmatched presently. The weekly bearish outside range left two weeks ago on the back of Emmanuel Macron’s France presidential victory was a classic bear trap. But for our ardent readers, the bullish move wasn’t a surprise as we consistently updated our previous piece. Going forward, we expect the EURO to be supported on dips. Presently, price closed above the 61.8% Fib level of the 1.1461 high to the low of 1.0340. On dips, 1.1130 should provide some base for the next leg higher towards 1.1342 (78.6% Fib as shown in the chart above). Only a breach of 1.1100 will bring a deeper correction.
22-26 May EURUSD weekly technical outlook; 4H Chart
The 4 hourly frame of the eurusd looks quite stretched and scream for some decent correction. However, selling this weakness isn’t quite advisable. Going forward, 1.1150 (lower channel) is a region to watch on the 4 hourly frame. A breach of the 1.1150 handle and 1.1130 could be the next reaction zone. As usual, trust us to keep you updated all through the week as price action develops around our actionable levels.
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