The EUR/USD has been making higher highs since it has retested its low 1.0458 and now the traders want to know if we have formed a bottom and the path of least resistance is towards the upside. Certainly not, for this downward trend to change, we need to see two important shifts. Firstly, the ECB monetary policy need to curtail its purchase QE program substantially. Finally, the US monetary policy has to change, which means no more interest rate hike infact, they have to start another round of quantitative easing. The odds for both scenarios are next to none.
We believe that the recent upward trend is losing its steam rapidly and the resistance of 1.13 has become a major hurdle for the EUR/USD pair.
The technical analysis suggests that the MACD and the RSI are reflecting the upward momentum has reached its optimum level. Although, the price is trading above its 50 day (shown in yellow) and the 100 day (shown in red) moving average and this confirms that the bulls are still in control of the price. The next major resistance zone is at 1.541-1.1585.