EUR/USD Rides US Dollar Weakness: Buy the Dips as Bulls Eye 1.19 Breakout

EUR/USD was one of the best performers previous month on board-based US dollar weakness. It hits an intraday high of 1.18293 and is currently trading around 1.18104.

Because of rising fiscal worries, increased political uncertainty, and negative market reactions, the contentious and delayed attempts by the US Senate to pass President Trump's significant tax cut and spending measure have weakened the US dollar. The bill's predicted addition of $3. 3 trillion to the national debt, internal Senate divisions, and marathon negotiations have investors concerned about US fiscal sustainability and debt, therefore lowering demand for US Treasuries and triggering diversification away from the dollar. Further aggravating market anxieties, the risks associated with a $5 trillion debt ceiling increase and possible default have caused continuous downward pressure on the currency.

The pair is holding above the short and long-term moving averages in the 4-hour chart. Near-term resistance is seen at 1.1835; a break above this may push the pair to targets of  1.19090/1.1956/1.200.  Major bullish momentum is likely only if prices can break above the 1.200 targets, 1.2100. On the downside, support is seen at 1.1760; any violation below will drag the pair to 1.1700/1.1660/1.1600.

Market Indicators and Trading Strategy

Commodity Channel Index (CCI)-  Bullish

Average Directional Movement Index (ADX) - Neutral

 It is good to buy on dips around 1.17600 with a stop-loss at 1.1700 for a target price of 1.1900.