Euro-Dollar: Hidden Bullish Divergence Detected, EUR/USD Should Stay Bullish
23 / May / 22
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(DailyFX.fr) - We are pretty bullish on the Euro-Dollar (EUR/USD) this morning as technical support is set at $1.113 on Monday. Around 10:30 CEST, prices are above our first bullish target of $1.1245 and a test at $1.1285 is now possible.
While market conditions have seemed to favor range trading strategies since last week, our technical analysis suggests a resumption of the EUR/USD uptrend after several sessions of consolidation. During our daily webinar today at 9:15 am, we revealed a hidden bullish divergence in the EUR/USD hourly RSI. A bounce to $1.113 this morning confirms this divergence and could allow the euro to rise above $1.13 in the coming hours.
If the EURUSD exchange rate exceeds $1.13 today, the euro could rise to $1.14 by the middle of the week if the euro zone growth data expected on Wednesday morning is good. As a reminder, traders expect economic growth to accelerate in France during the first three months of the year, while in Germany they expect a slight slowdown. If Germany's GDP turns out to be better than expected, then, naturally, the necessary conditions will be created for a further recovery of the euro.
Given the hidden bullish divergence evident in our chart below, selling EUR/USD resistance levels is risky. Such a technical configuration would rather favor a return to $1.14 this week and possibly even a rise to $1.15 before the end of the month. So be aware of the risk of the euro-dollar rising this afternoon.
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