Technical tools: simple moving averages (20, 55 and 100), the relative strength index, Bollinger bands, Fibonacci retracement levels, channel lines and trendlines.
The following daily chart presents Fibonacci retracements from the 2016 high till the 2017 low. There is also a representation of a descending trendline that connects the highs of 2016 in May and November. The EUR/USD seems to be trading in a medium-scale ascending channel as represented in the following chart.
In the aftermath of French elections first round, the exchange rate opened the trading session with a gap, that hasn’t yet been fulfilled. The longer it is unfilled, the more bullish are the implications.
The ECB meeting this week stands out as a risk. The ECB President might playdown the recent outperformance across several PMIs, since manufacturing, through services till the composite, which ticked higher in April’s flash release till 56.7 from 56.4 in March.
Recently updated German Ifo Business Climate Index surged to 112.9, a 6-year record high.
The daily RSI, as presented in the following chart is at 70. A short-term correction might be triggered following ECB’s next meeting on April the 27th. Daily SMAs are in fact positioned favouring further bullish developments with the 20 above the 55 and the 55 above the 100-day SMAs.
The Bollinger band is widening, as the exchange rate pierces the upper band, proving that this bullish impetus will likely consolidate before resuming once again.
If Macron wins…