Following a volatile Q1, EUR/USD gained strong upside traction breaking above the long-term downside trendline from the 2008 high. Essentially, the fact that the euro managed to clear this important barrier was a strong bullish signal. The 1.45 mark would be an ambitious target for investors who expect the shared currency to perform well in the next years, according to economists at Rabobank.
Key quotes
“The 38.2% Fibonacci retracement of the 2008-2017 trend lower is the next objective for the EUR bulls. Note that this level coincides with the 2018 top forming a potentially strong resistance area around 1.25.”
“Given that the previous two major moves higher this year were followed by pullbacks, another correction is most likely to unfold in the coming weeks. Strong market preference to buy dips should limit a correction to around 1.20/1.19.”
“We are not particularly bullish on the euro, but those market participants who expect the single currency to perform particularly well in the coming years may have an ambitious target at around 1.45 obtained by measuring the distance between the 2017/16 low and the key trendline. Note that using the same simple technic in reverse provided an accurate bearish target in 2015.”
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