Over the last few sessions we have seen the dollar regain strength against the forex majors and today's session again marks the strength of the USD that leads the gains.
The economic calendar is practically empty, but liquidity in the market has not been limited.
Technical Analysis EUR/USD: 4 hours time frame chart.
On the 4-hour chart we can see that the bearish movement has been intensifying over the past few sessions after sellers managed to break below their uptrend line.
Right now, we see that the pair is correcting upwards, however, that correction may be limited. It should be noted that the price is approaching the downtrend line that coincides with the 50-period EMA as well as the Fibonacci levels at 61.8%.
In case buyers are unable to break above that zone, then bearish movement could resume soon.
EUR/USD, 4 hours time frame chart. Source: xStation 5
US dollar Index (USDIDX)
On the other hand, the dollar index is starting to give contradictory signals to the EUR/USD pair. On the 4-hour chart we can see that buyers are struggling to break through the Fibonacci levels between 61.8% - 78.6%.
As long as the price remains below that zone, we can continue to view the USD in a short to medium / long term perspective.
However, once buyers manage to overcome these obstacles, the US dollar could appreciate strongly against the majors, in particular against the EUR/USD.
USDIDX, daily time frame chart. Source: xStation 5
AUD and CAD are the best major performers, while the CHF and JPY are the worst performers among the fx majors.
Henrique Tomé, XTB Portugal
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