The US dollar underperformed against its major counterparts last week amid a high-risk appetite. The economic docket for this week is relatively light, which is why our focus will be on the technical picture rather than on the fundamental backdrop.
Euro Gains as The Greenback Weakens
We got a bullish breakout with the pair exiting its recent downtrend channel and clearing the 1.14-resistance. The pair could now be creating a new short-term upward trend channel ranging from 1.15 to 1.13.
EUR/USD bulls that dream of a run for 1.16 should wait for an upside break above 1.1530. However, given that the euro was a benefactor of broad US dollar depreciation, rather than strength on its merit, further gains might be on shaky ground.
For bearish momentum to accelerate and drive the euro back into sell mode, we would need to see a break below 1.1250 but, more importantly, below 1.12.
Our trading ideas for today: Long at 1.1435, Short at 1.1380. Secure some pips, max TP is 40 pips.
Political Instability Has No Impact on British Pound
While the UK Premier minister Boris Johnson is facing a tough time, the pound benefits on a softer greenback and shows almost no reaction to a potential ousting of Boris Johnson. Since the pound posted an almost straight-lined upward movement, we expect a correction to happen soon.
A break below 1.3650 could lead to a drop toward 1.36, potential short-term support. We will then focus on a break below 1.3560, with a lower target seen at 1.35. On the upside, and if the potential 1.36-support remains intact, the 1.38-mark could act as a resistance.
Our trading ideas for today: Long at 1.3710, Short at 1.3660. Secure some pips, max TP is 40 pips.
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumptions of MaiMarFX traders. They are not meant to solicit or recommend buying or selling a specific financial instrument.