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#1 27-05-2021 13:48:54

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: the euro remains near a 12-month high vs the dollar

EUR/USD: the euro remains near a 12-month high vs the dollar


Against the backdrop of waning fears of a return to high and rapid inflation, the single currency, a marker of risk appetite in the financial markets, remained at firm levels in the short term, albeit with no affirmation of a fundamental bias against the dollar. Forex traders are still waiting for the respective tones to be used by the ECB and Fed Presidents next month, on the occasion of a high-stakes FOMC and Governing Council meeting. The single currency thus remains not far from its annual highs, with 10-year Treasuries remaining at a very contained level.

There was not much to report on Wednesday on the macroeconomic front. However, we should mention the stronger than expected weekly contraction in US crude oil inventories (-1.7 million barrels), which did not have a significant effect on WTI prices. 

Right now, the pair is trading at $1.2191.

KEY CHART ELEMENTS
The crossing of the upper limit of a former bearish channel is now fully validated, by the increase in volatility in particular on 23 April, and by the consecutive crossing, in the wake, without any form of hesitation, of the 100-day moving average (in orange). The black marubozu traced on 30 April was followed by the white marubozu of equivalent magnitude on 7 May, already fully retraced... Testifying to the very short term nervousness on the currency pair. Neutral opinion proposed.

MEDIUM TERM FORECAST
Given the key chart factors we have mentioned, our medium-term view on the Euro Dollar (EURUSD) is neutral.

We will maintain this neutral view as long as the Euro Dollar (EURUSD) is positioned between support at $1.2200 and resistance at $1.2354.

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