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market analysis
The euro is being sorted out at a high level, what is the possibility of technical forms hidden?
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: Euro is well organized at a high level, what is the possibility of technical forms hidden?" Hope it will be helpful to you! The original content is as follows:
On Friday (July 25), the euro-dollar exchange rate was slightly under pressure during the European period, trading around 1.1735. Although the US released a strong macro data to support the US dollar, the market's desire for the EU to reach a trade arrangement with the US has kept the euro strong as a whole.
Franchise
The euro overall performance this week was strong, mainly benefiting from the dovish pause signal released by the European Central Bank (ECB). Although President Lagarde continued his statement of "as determined by the meeting", he expressed optimism about the outlook for economic growth in the euro zone, saying that inflation risks are "strongly anchored", and the market therefore delayed expectations for the time of interest rate cuts. This shift has significantly boosted euro bulls' confidence.
However, the German IFO business prosperity index released on Friday performed worse than expected. Although the current situation index improved slightly, rising from 86.2 to 86.5, it was lower than the market expectations of 86.7; the expected index remained at 90.7, lower than the market expectations of 91.1. This shows that xmserving.companies are still cautious about the future economic environment, weakening some euro buying.
At the same time, a series of strong data released by the United States provides support for the US dollar. In July, the S&PGlobal service industry PMI jumped to 55.2, far exceeding the expected 53.0; at the same time, the number of initial unemployment claims fell for the sixth consecutive week, reaching a three-month low of 217,000, reflecting the still resilience of the US labor market. These data strengthen market expectations for the Fed's "long-term high interest rates" and limit the euro's gains.
In addition, according to market rumors, the EU and the United States are finalizing a trade agreement involving tariff reductions and exemptions from some xmserving.commodities (such as automobiles, alcohol, etc.), if implementedIt will help boost the euro's medium-term outlook. These news has enabled the exchange rate to maintain a relatively stable oscillation pattern at high levels.
Technical:
From the daily chart, the euro-USD is between the middle and upper rails of the Bollinger band, indicating that the exchange rate is currently in a moderate upward channel. Currently, the middle rail of the Bollinger band is around 1.1694, forming effective support; the upper rail of the Bollinger band is at 1.1844, which is short-term resistance.
K-line pattern shows that since the low point of 1.1065, the exchange rate has formed a structurally xmserving.complete upward trend, and hit a stage high of 1.1829 in early July. Although there was a certain retracement afterwards, it stabilized after the minimum correction to 1.1556, and it re-established on the Bollinger middle track, forming a technical structure of "retracement confirms support". The current fluctuations are converging, indicating that bulls are still taking the initiative, but the momentum is becoming weaker.
In terms of MACD indicators, the fast line (DIFF) and the slow line (DEA) hover around the zero axis, and the MACD bar chart continuously shortened, indicating that the kinetic energy has weakened but no obvious reversal signal has appeared. If the subsequent fast line moves back to the slow line, it is expected to push the exchange rate to challenge the resistance above 1.1829.
The RSI indicator is currently at 58.75, in the neutral and strong range, and has not entered the overbought, and there is still room for upward. Overall, the daily technical structure is relatively large, but the short term may face high-level oscillation consolidation.
Prevention of market sentiment:
Current market sentiment tends to be cautiously optimistic. On the one hand, the euro strengthened under the ECB signal, and the market interpreted its position of "suspending interest rate hikes but not rushing to cut interest rates" as confidence in the economy; on the other hand, the continued strong US economic data has made the US dollar still support. The bulls and bears are forming a balance at the current price, and the market lacks strong catalysts to promote breakthroughs.
It is worth noting that the exchange rate showed a moderate rebound in volume and convergence of volatility this week, reflecting the short-term "waiting for breakthroughs". Technically, if the euro stands firm at 1.1750 and rises in volume, it is expected to form a new round of trend rise; on the contrary, if it falls below the Bollinger middle track at 1.1694, it may trigger a short-term take-profit trading to surge out, breaking the current fluctuation pattern.
From the market structure, this week's pull-up is not panic buying, but gradually building support and forming a raised bottom structure, indicating that market sentiment is closer to "stable and long" rather than "radical chasing highs". However, given that there are no clear changes in the policies of the European and American central banks in the short term, the market is more inclined to wait for more economic data and policy statements to guide the direction next week.
The above content is all about "[XM Foreign Exchange Market Analysis]: Euro is sorted at a high level, what is the possibility of technical forms hidden?", which is carefully xmserving.compiled and edited by the XM Foreign Exchange editor, I hope it will be helpful to your trading! Thanks for the support!
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