Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Technical Analyst, Saxo Bank
If EURUSD instead closes below parity and RSI fails to close above 60 selling pressure could resume
EURUSD closed yesterday above its upper trend line in the falling channel going back till February this year now trading above parity. If closing above parity today and if RSI closes above 60 threshold the uptrend has been confirmed. An uptrend that has the potential to move to 1.02, possibly up to strong resistance at 1.0370
If EURUSD instead closes below parity and RSI fails to close above 60 selling pressure could resume
EURUSD reached 1.618 projection of the 2020-2021 correction at 0.9576. Monthly RSI touched previous all-time lows and is currently trading around the middle line in the wide decade long falling channel. Resistance around 1.0350-1.0370 will be key for medium term outlook.
Weekly chart has been showing divergence for several months. A correction was in the cards.
However, if Bears cannot push the Dollar Index below 107.67 a rebound should be expected.
A rebound that could turn in to higher levels.
Because from the monthly chart there is no RSI divergence and no strong resistance until around 121. The Dollar Index could perform a correction own to around 105 without demolishing the longer-term uptrend picture.
If monthly RSI bounces off 60 threshold the longer-term uptrend could resume towards new highs