EUR - The euro is in a double bottom pattern, waiting to break out to establish an uptrend

The euro is in a double bottom pattern, waiting to break out to establish a rising trend

The dollar was broadly steady this week, with the U.S. dollar index holding not far below a 20-year high hit mid-month, as investors sought safety in U.S. assets as global stocks fell on heightened recession risks. Asian, European stocks slipped, tracking losses in Wall Street on Tuesday, as U.S. consumer confidence data plunged as the Federal Reserve scrambled to raise interest rates to rein in high inflation, fueling fears of a slowing economy The Board of Governors (FED) is rushing to raise interest rates to control inflation. The dollar index rose to around the 104.50 level on Wednesday, mainly stimulated by a weaker euro; on June 15, the dollar index hit a 20-year high of 105.79. In terms of technical trends, the US dollar index has been trading sideways around the 104 level recently; however, the technical chart sees that the 5-day average has just broken below the 10-day average to form a bearish cross, and the MACD indicator has just fallen below the signal line. It seems that the US dollar is brewing With a larger pullback pressure, the support level will look back at 103.90 and the 25-day average at 103.10, and the key point is the rising trend line at 102.10. Resistance is back at 105 and this month's high of 105.79.

The euro against the dollar again failed to break the 1.06 mark, falling back to around the 1.05 level on Wednesday. European Central Bank (ECB) President Christine Lagarde offered no new insights into the path of European interest rates at the central bank's annual forum. The ECB is widely expected to follow its global peers in raising interest rates for the first time in a decade in July in an attempt to cool soaring inflation. In terms of technical trend, since it touched above 1.1495 on February 10, the exchange rate fell repeatedly until it hit a low of 1.0348 on May 13, with a cumulative decline of about 1150 pips, and formed the first bottom of the recent month market, followed by 5 On March 30, it rose to 1.0786, which is just the 38.2% rebound rate calculated by the gold ratio. After that, the euro turned around and fell. It hit a low of 1.0357 two weeks ago, which is quite close to the low in May, and also formed a double bottom. The initial pattern is that the next trend is subject to the 25-day moving average, which has caused the euro to stagnate in the past two weeks. See vertical tube technical chart, RSI and stochastic index are currently in decline, but it is estimated that the decline is limited. The closer support is to look at 1.0450 first, the key is the position of the double bottom at 1.0350, so we should also pay special attention to once this area is clearly lost in the market outlook, it will be another start for the euro to weaken again; The depth is about 440 points as a technical extension target, and there will be a chance to test to the 0.9910 level. On the other hand, there are three areas of resistance that need to be paid attention to. First, the 25-day moving average, which has not been broken several times in recent days, is currently at the 1.06 level, and then the downward trend line extended from the February's high to the present is at 1.0635, which can be broken. The initial technical signal for the euro to rise again; and if it can further cross the neckline at 1.0790, it is expected to be a stronger upward signal. It also extends the depth of the double bottom pattern, and the medium-term technical target is the 1.1230 level.

Estimated volatility:
Resistance 1.0600/35* – 1.0790 - 1.1230
Support 1.0450 - 1.0350 - 0.9910

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