S&P 500 (US500) ended for the 3rd consecutive week with losses. The declines in the indices have been supporting the appreciation of the u.s dollar, which in turn has been putting pressure on the major currencies, particularly the EUR/USD.
EUR/USD has been trading lower over the past few weeks. However, the bearish momentum seems to have slowed down around the 61.8% Fibonacci levels.
From a technical point of view, it appears that we are facing a chart pattern - falling wedge - which the lower limit of the structure also supports a slight recovery of the short-term bullish momentum of the euro against u.s dollar.
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4 hours Time Frame Chart. Source: xStation 5
As long as the price remains above the current structure and above the Fibonacci levels, the upward movement could resume soon. On the other hand, a drop below this zone could prolong the losses towards the next Fibonacci level at 78.6%.
Henrique Tomé,
Analyst at XTB Portugal
