FxWirePro: EUR/USD short term outlook

In the previous article on EUR/USD, we suggested that the bulls and bears are fighting a fierce battle in this pair, one trying to push it towards 1.11, while the other one is looking to push it below parity. While we favor the downside, we can’t completely rule out the upside potential.

Moreover, the recent weakness in the dollar has benefited the bulls a lot, who were successful in pushing the pair from a bottom of 1.033 to 1.069 as of now. After finding support around 1.036 area, the bulls pushed it to 1.066, only to see it falter towards 1.034. However, the bears couldn’t push it further from there and bulls broke the high around 1.066 and pushed the pair to 1.071 area. Hence, we think that the bulls do have some strength and the pair might drift higher.

The key resistance for the pair lies at 1.086-1.09 area, where the bulls would have to prove themselves and breaking of which could push the pair to as high as 1.11.

Saying all that, all traders in this pair should watch out for the European Central Bank’s (ECB) monetary policy meeting scheduled for tomorrow.