FxWirePro Short Term Outlook: Euro likely to rise towards key resistance around 1.165 area

The current fundamental is not being supportive of the dollar and that might push the euro towards a test of 1.165-1.17 area against the dollar. The European Central Bank (ECB) has probably hit a short term limit in its easing and likely to keep policy rates stable. In March, it has already delivered a comprehensive easing package; the effect of which is likely to be felt till 2021, especially the Targeted long-term Refinancing Operation (T-LTRO). Another big risk for the euro bulls has been the impact from a British exit from the European Union, However that could take a much longer horizon to be felt. Due to the above factor, we, at FxWirePro has already given a call in Euro to the short side targeting 1.01 against the dollar but the short term fundamental, especially the weakness in the dollar points to a larger rebound for the pair (EUR/USD).

The U.S. Federal Reserve has been downgrading long-term interest rate forecast since 2015 and the effect of that on dollar has finally started to be felt.

Trade idea:

We are maintaining our medium term outlook for the Euro to the downside but believe that in the near term, the single currency can move towards a test of last year’s high around 1.17 area.