The Eur/Usd catapulted northward during Asian and London session last week Friday after investors reacted to European Central Bank Governing Council member Jens Weidmann’s speech, on Germany’s Bild newspaper .
He stated that keeping interest rates low may endanger political reforms. He further suggested that Interest Rates should be raised again if inflation pressure continues to build. This drove the Eur/Usd bizarre as investors demanded for the pair with so much anxiety.
However, the rally was limited as the pair later saw decent decline, trimming its gains massively during the US session.
The pair was able to break 1.3831 resistance, the highest it made since January 2013 to create a new high at 1.3891 but later closed lower, forming a rejection candle pattern on the daily charts.
In the near term picture, Eur/usd remains neutral as MACD, RSI, 55EMA and SSRC(stochastic) signals bearish on the 15 and 30minutes timeframe which is contrary to the long term trend, which happens to be bullish on the 4hrs, daily and weekly charts.
However, long side remains valid on the pair as long as support 1.3624 holds, a break of support 1.3624 would confirm a reversal to the down side.
Sell Eur/Usd at the break of 1.3730 with SL at 1.3778 and TP at 1.3624
Buy Eur/Usd at the break of 1.3778 with SL at 1.3730 and TP at 1.3890