EURUSD has become non-volatile and impulsive and reached near 1.1400 area. EURUSD strike higher as ECB approved a stimulus package of 1.35 trillion Euros to fight against COVID-19 pandemic. Can EURUSD recover further? What are the charts and technical indicators are saying? Read more to find further insights into today’s EUR/USD Technical Analysis.
June 5, 2020, | AtoZ Markets – EURUSD is currently trading around 1.1370 area and trying to push higher. The price broke above the descending channel resistance quite aggressively and gained around 500 pips in just last two weeks. As per the current price action, EURUSD may climb further, but the nearest level of 1.1410 may act as strong resistance.
EURUSD Strike Higher as Euro Boosted by the Stimulus Package
The European Central Bank has approved a stimulus package of 1.35 trillion Euros, which is bigger than expected. The Europen economy has dived into a recession because of COVID-19. Its the worst recession since World War Two. ECB said the stimulus package would increase bond-buying by 600 billion Euros to 1.35 trillion Euros and this will run until June 2021.
Besides, ECB President Christine Lagarde said, “The Euro area economy is experiencing an unprecedented contraction. There has been an abrupt drop in economic activity as a result of the coronavirus pandemic and the measures taken to contain it.”
On the other hand, the United States Non-Farm Payrolls and the Unemployment Rate report is going to publish today. The Non-Farm Payrolls may come worse than before as the U.S. economy experiencing a bad time because of COVID-19 and the ongoing protest. The Non-Farm Payrolls predicted 7750k. If the actual comes greater than forecast, it will be the worse for the U.S. economy as well as the U.S. Dollar. In addition, the Unemployment Rate was predicted at 19.4%, which increased than before 14.7%. There is a high chance that the Unemployment Rate may increase in the percentage.
EURUSD to Break Above 1.1410 Area?
According to the daily chart, EURUSD is currently residing near 1.1370 area and trying to strike higher. After bouncing from 1.0890 area, the bulls push the price higher aggressively and break above the descending channel. As per the current price action, there is a high chance that the price may reach 1.1410 area.
Image: EURUSD Daily Chart
So, if the price reaches 1.1410 area and rejects, the bears may regain momentum and push the price down towards the descending channel resistance, which is around 1.1100 area. Alternatively, if the price breaks above 1.1410 area with a daily close, the bulls may recover higher towards 1.1570 area in the coming days.
Furthermore, the dynamic level of 20 EMA is currently residing far below from the current price. Along with the Kijun line and the Tenkan line. The dynamic level of 20 EMA may pull the price down back to the Mean. The Kijun line and the Tenkan line may work as a confluence of the dynamic level. Besides, the RSI indicator’s line is currently residing above the overbought level 70. It indicates there is a high chance that the market may reverse back.
To conclude, after an extended period of volatility, EURUSD has broken above the descending channel. A daily close is needed above or below 1.1410 area to find the definite momentum in the coming days. As the NFP and the Unemployment rate report is going to publish today, anything can happen.