Chart Of The Day: Has The Euro's Year-Long Downtrend Ended?
Investing.com | May 16, 2017 11:50
by Pinchas Cohen
After the Washington Post reported yesterday that US President Donald Trump shared classified intelligence secrets with Russia's foreign minister and their US ambassador at a White House meeting last week, the euro catapulted back into favor, which had a devastating effect on the US dollar. The Dollar Index fell as much as 0.44% earlier, to an intraday low of 98.476, a fourth consecutive decline for the greenback which has now had an accumulative loss of 1.41%.
The euro’s boost was three times that of the safe haven Japanese yen. The lift was also enough to push the single currency past its previous high of the year at 1.1023 on May 8, dispelling the potential of a small H&S that was forming. The more important breakthrough, however, is the upside breakout of the falling trendline that's been in place for more than a year, since May 3, 2016.
In late April the 50dma approached the 100dma and then both advanced, with the 50dma in the lead. Now, the 50dma is fast approaching the 200dma.
The 50dma’s ambition, to cross over the 200dma, may be premature however, as a “Golden Cross” is achieved only when the 50dm crosses over a rising 200dma, which in this case is languishing lower. Still, the fact that the currency pair has been able to stay above the 200dma for 17 trading sessions, since April 24, along with the EURUSD overcoming its previous high of May 8 and crossing over the year-long downtrend line, are all very bullish momentum signals for the euro.
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