- The Euro against US Dollar Forex rate, EURUSD has signalled a far more bullish tone, as we highlighted in mid-July.
- The “risk on” theme has been lifted by the deal on the EU Recovery Fund this week.
- Alongside hopes from positive trials for both treatments and a vaccine for COVID-19.
- Risk assets are breaking out to the upside, whilst the safe haven US Dollar is weakening across the FX board.
- This leaves the threat for further EURUSD gains into today, for latter July and maybe into August.
EURUSD bullish signal above key 1.1496 swing/ cycle peak
Day trade update and view
A Tuesday advance above the key 2020 cycle high at 1.1496 and the psychological/ option barrier at 1.1500, signalling a longer-term basing pattern, to build on Monday’s prod above the recently set new cycle high at 1.1452 and 1.1457 resistance from March, plus last Friday’s rebound from just below the modest 1.1385 support, from 1.1369, to keep the risk higher into Wednesday.
Day trade setup
- We see an upside bias for 1.1547 and the key 2019 cycle high at 1.1570; a break here aims towards maybe 1.1621.
- But below 1.1481 opens risk down to 1.1421 and possibly 1.1369.
EURUSD intermediate-term outlook
The early June rally above 1.1147 set an intermediate-term bull trend.
- Upside risks: We see an intermediate-term bull trend for 1.1815 and 1.1996/1.2000
- What changes this: Below 1.1166 switches the intermediate-term bull trend straight to bearish.