EURUSD:Towards an upside CORRECTION before heading to 1.20
EURUSD pair is rather low. ECB is willing to import inflation into eurozone because the EUROZONE area cannot yet create its own demand. Therefore, the main idea is unofficially to devaluate EUR against USD so that commodities prices raise in EUR term. Europe depending on imported Commodities, mechanically the price would raise in the eUROZONE making the 2% target achievable for ECB.
However, ECB did not commit all the T-LTRO nor the ABS in one shot. FED din't yet increased its prices. Although FED will put an end to QE3 this month, there is still cheap money in the market. Therefore, USD may consolidate a little bit towards 1.30 are around i.e 0382 % of Fib retracement before plunging down towards 1.20
On a purely chartist approach, one can see that if the orange short term trend line breaks, this will be a confirmation of the consolidation of USD against EUR . One should not expect EUR to go over the blue trend line which is a medium term/long term trend line.
RSI is oversold because sellers were very harsh against EUR but there will be a little market correction.
However, ECB did not commit all the T-LTRO nor the ABS in one shot. FED din't yet increased its prices. Although FED will put an end to QE3 this month, there is still cheap money in the market. Therefore, USD may consolidate a little bit towards 1.30 are around i.e 0382 % of Fib retracement before plunging down towards 1.20
On a purely chartist approach, one can see that if the orange short term trend line breaks, this will be a confirmation of the consolidation of USD against EUR . One should not expect EUR to go over the blue trend line which is a medium term/long term trend line.
RSI is oversold because sellers were very harsh against EUR but there will be a little market correction.
