- EUR/USD trades in a 1000 pip range since the beginning of 2015
Ttouched the top of the range last August and reversed to the long-term range low
Was recovering slowly and trades now at the very important 1.1030 / 1.1095
If the pair closes above the August 2015 - October 2015 descending and the 1030/1095 then the space opens up towards the next at 1.1350 - 1.1450
As the FED has just started its rate hike cycle and the ECB clearly wants to see the Euro lower, the heavy upside movement seems to be against the fundamentals.
Contrary to the downward bias EUR/USD trended higher as risk-aversion is increasing. Implied volatilty levels are increasing. The VIX indicies are also on the rise. US 10Y yield drops. JNK , HYG , EEM (emerging market ETFs) are heading down. Stock indicies are at least struggling. JPY gains contrary to recent BoJ measures. These all tell that the market is hesitant and till the above conditions do not easy the Euro is going to be bid.
I believe that this Friday's NFP can be a very good catalyst to increase the risk-aversion level of the currently hesitant market and EUR/USD targets the long-term range top.
Stop @ 1.0995
Take profit @ 1.1400