Will EURUSD avoid its 2017 low?
The Euro has shown plenty of weakness against the US dollar since the beginning of the year. The last significant strength it showed was in the last week of January. Since then, it aggressively shot for its pre-pandemic prices in early 2020. The next low it’s looking for is perhaps from 2017, at 1.03400. However, it showed strong bullish sentiment in the week that just passed. This could mean that the Euro holds off the 2017 lows for the time being.
For interest sake, while the Euro has taken out 2020 lows, GBPUSD is still over a thousand pips away from its respective low of 1.14000. The GBPUSD closed last week at 1.24900.
On the EURUSD chart below, there is a Parabolic SAR indicator employed, with a step of 0.02 and maximum of 0.2. This typically tells us the strength of a trend and perhaps when to anticipate reversals or at least when the trend is slowing down. Price has finally come to poke above the long trend that started on April 25 while also forming three new dots on the bottom.
Figure 1. EURUSD 1D
Looking ahead to this week, there’s plenty of high impact news to inject volatility into the market, including Composite and Markit PMI from Germany on Monday and Tuesday. We also have many other high impact news on Tuesday not just for the Euro but for USD and GBP that may show us a lot of whipsawing back and forth. On Wednesday there is an interesting event taking place at the World Economic Forum annual meeting. European Central Bank President Christine Lagarde will be part of a panel addressing the ominous subject “European Unity in a Disordered World?”