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EUR USD Technical Analysis - EUR USD Trading: 2017-09-11
Strong economic growth bullish for euro
Improving euro-zone growth is bullish for euro. Will the euro continue the rise against the greenback?
Euro-zone growth was upgraded last Thursday. Euro-zone economy expanded 2.6% in the second quarter, up from the 2.5% rate of growth Eurostat estimated in August. European Central Bank President Mario Draghi suggested at September 7 press conference that the ECB may begin tapering its massive stimulus program. Following the ECB policy meeting there were reports policymakers were in broad agreement that their next step will be reducing their 60 billion euros monthly bond purchases and discussed four options. Improving euro-zone economic growth and impending tapering of asset purchases are bullish for the single currency.
On the daily timeframe EUR/USD continues the rally after it hit 32-month high two weeks ago.
- The Donchian channel indicates an uptrend: it is tilted up.
- The MACD indicator is above the signal line and the gap is widening, which is a bullish signal.
- The Parabolic indicator gives a buy signal.
- The stochastic oscillator has not breached into the overbought zone.
We believe the bullish momentum will continue after the price closes above the upper Donchian boundary at 1.2092. It can be used as an entry point for a pending order to buy. The stop loss can be placed below the last fractal high at 1.1822. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.1822) without reaching the order (1.2092) we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Technical Analysis Summary
| Position | Buy |
| Buy stop | Above 1.2092 |
| Stop loss | Below 1.1822 |
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