The EUR/USD has resumed its rather strong bullish momentum the past two days and is challenging important resistance levels. In early trading this morning the 1.18500 vicinities has been a battleground as the forex pair may be facing an accumulation juncture as a wait and see approach is contemplated. Caution rules early trading this morning as mixed results have been seen globally and the equity indices remain nervous about prevailing shadows.
The EUR has enjoyed a solid trend higher against the USD since March of 2019. This long term bullish momentum is not likely going to disappear and the EUR/USD appears to be ready to consistently create higher values incrementally. However, this trend is not a one-way avenue for speculators and reversals are part of the trading landscape.
After the 1.184000 resistance level was punctured higher yesterday and values were sustained above this mark the EUR/USD then challenged highs near the 18.80000 juncture. However, these gains may have the look of being too swift and they may attract skeptical speculators who believe the EUR/USD could see a short term reversal develop which test support levels temporarily.
One of the reasons speculators may be tempted to look for downside action from the EUR/USD is because risk appetite appears to be in short supply today. Global equity indices have struggled to put in gains and have actually produced negative momentum this week. This has occurred as cautious trading mounts via the upcoming US election, and legitimate fears regarding the potential implications of the second wave of coronavirus which is beginning to hit Europe.
Selling the EUR/USD goes against the trend and if speculators are going to pursue bearish momentum they should have risk management locked and loaded via limit orders to protect their accounts. The perception that the EUR/USD gains yesterday were too fast and will not be sustained if risk-averse trading intensifies today and tomorrow before going into the weekend cannot be faulted. Looking to sell the EUR/USD around the 1.184800 to 1.185300 price range may prove a good short term speculative trade for traders who believe some downside action will develop a short term for the forex pair.
EUR/USD Short Term Outlook:
Current Resistance: 1.18680
Current Support: 1.18350
High Target: 1.18900
Low Target: 1.18150
