EUR/USD once again tested the support line from the November lows, but managed to remain higher. The weekly candle was bullish, but there’s still resistance at 1.1415 and 1.1465, which is limiting the pair on the upside. The pair will likely trade between 1.1350 and 1.1230 ahead of the Brexit vote on Thursday.
Upcoming important news in the euro area’s economic calendar include German ZEW economic sentiment and the speech of the ECB president Mario Draghi on Tuesday, German IFO business climate on Wednesday and the region’s PMIs on Thursday. In addition, the European Central Bank will implement a targeted LTRO program on June 22, in which it will pay commercial banks to use its money. The banks will be required to lend the money to its customers. This is a form of monetary stimulus.
We’ll watch the figures out of Europe, but note that the single currency is largely driven by the expectations connected with the UK referendum and the dynamics of the British pound. The remain vote will make the euro appreciate to 1.15 (100-week MA) and potentially to 1.16. If Britain chooses to leave the euro area, the uptrend of EUR/USD will head to 1.08. No Brexit is a mire likely scenario.