Technical Update - Will EURUSD test parity? Bigger picture
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: EURUSD is closing in on parity. Will it test it and break it? US Dollar Index close to test 2017 peak and resistance. If broken the Index is likely to reach levels not seen in 20 years.
EURUSD has broken below support at around 1.0730 and is dropping fast towards key support at 1.0340. A break below, which is likely EURUSD will be set for parity i.e. EURUSD at 1.00.
That level is not a technical level but merely a psychological level. A test and especially a break of Parity is for sure something that will create headlines worldwide.
If parity is broken we are likely to see a dip to around 0.96 before a bigger correction. 0.96 was the bullish break out level from the 2000-2002 Bottom, Consolidation and Reversal area in the form of a Symmetrical Triangle pattern.
RSI below 40 and no signs of exhaustion. Bollinger Bands expanding i.e. we are in initial phase of the (down)trend
The US Dollar Index is closing in on 2017 peak at around 103.82. If broken a likely price target is around 110 where there is a cluster of Fibonacci levels.
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