EUR/USD: Uptrend Develops, Further Upside Eyed

The outlook for the Euro in the next 24h is unambiguously bullish. The dashboard above represents the positive outlook, with both technicals and intermarket flows converging to expect further demand imbalances. What’s also important is to acknowledge that in the scenario that the EUR/USD trend really takes off, we are just coming out of a macro trend as per the prolonged downward slope of the 5-DMA (125-HMA), which means that from a risk-reward perspective, this could be a potentially attractive period to build long positions in order to capitalize on the broad-based USD weakness. The chart, from a technical perspective, is a thing of beauty. We’ve validated a new swing high by finding acceptance above 1.1330, which means we can now draw an ascending trendline. Besides, most of the volume transacted in the last 24 (POC) has been trapped behind the close. Talking about the close, the currency pair has finished at the very high, which speaks volumes of the lack of supply. Allow me to also remark that the 125-HMA slope has finally turned north, while the German vs US yield spread, which has been playing a greater role in the carving of the bottom, did spike yesterday. Overall, this is a market that has all the credence for buy-side strategies to do well.