I thought i would discuss the topic of the Euro and if you are still bearish you may want to listen, in fact you should listen. There is quite a lot of traders out there that refuse to see the trend change.
I know fundamentals are not good and i know Europe is in a mess but there are many reasons that you should not be bearish on the pair at the moment or at least not to go too heavy.
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Reasons to be Bullish Rather than Bearish
- The technical’s have been showing bullishness since 1.20 area. If you now look on the weekly chart below there is a very good reason it became bullish here and a lot of it is not to do with relief of Draghi speeches.. I know they help but just look at the 1.20 area. This is the area on the chart price has bounced many times before in the past, so bouncing once again is not a surprise to me at all.
- Technicals still show bullishness and only if price breaks below 1.28 will that change.
- On the contrary if price breaks 1.3170 area then expect prices like 1.33 again.
- Draghi has opened the door to more open bond purchases.
- US is approaching fiscal cliff and US announced by Bernanke will weaken the currency with unlimited QE
- And lastly just recently UK announced a fabulous GDP result which is part of the euro zone as well so will help support some of the weakness. We cannot forget that some of the richest people in the world are still in the UK and that means they have an extra bonus up there sleeve.
Okay so that is my opinion, we could look at Greece again and Spain again with there ever so tiring problems, but to me the market i believe is getting a bit sick of hearing about there woes. Not to mention most likely all debts there will only be postpones for now.. Why you may ask? Well because there is money still flowing.
So does that mean never be bearish on EURUSD from what i am saying, no, not at all. Just that if one does want to sell the pair that all these attributes should be taken into account. The highest attribute of all being that the pair is moving up on the weekly chart and the top last time was as high as 1.47 to 1.50. These numbers are possible even during crisis’s it is all up to the big traders and so far they have brought it up as high as 1.31 area, there is no reason they will stop now.
With that all being said, i am bullish on the pair unless it breaks 1.28 as suggested above. If you are bearish for another reason please share your thoughts below.