Well, European currency starts a new week on a positive note. EUR / USD approached $1.2420 level and this is the upper limit of the wide side range (1.2240-1.2410), of course, there is another sign level $ 1.2510- $ 1.2550. In addition, looks like this level is very important for the future of the European currency.
European currency began to gain on Friday amid the wave of equities sale-off and a sharp market sentiment decline that caused a demand for safe-haven assets. EUR / USD strengthened above 1.2340, creating a springboard for today's growth.
Our forecast and expectations for the pair's growth up to the region of $ 1.2510 remains in force. But today we would like to focus on the other aspect and talk about more global assessments.
We draw attention to the long-term downward resistance line, originating somewhere in early 2008, at levels around 1.57 mark. This is the third contact of the market with this descending resistance line. The first two took place in 2011 and in 2014.
Regarding technical analysis rules, last 10 weeks consolidation around a significant 1.23 mark is a kind of a market preparation for the storming of this strategic resistance line. Breakthrough 1.2510 will lead to a completely new price range. In this sense, we will analyze how quickly the market will approach the $ 1.2510 level. If EUR / USD can not gain a foothold and test 1.2660, we can see a rollback to 1.20.