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The game between bulls and bears is becoming more intense. Can the euro hold on to 1.17?
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Hello everyone, today XM Foreign Exchange will bring you "【XM Group】: The long-short game is becoming more intense, can the euro hold 1.17?" Hope it will be helpful to you! The original content is as follows:
During the European session on Wednesday (July 23), the euro-dollar exchange rate fell slightly, trading around 1.1730, and still running above the middle track of the Bollinger Band. The technical side shows that the short-term trend is still strong, while the fundamentals slow down the euro's rise due to uncertainty in US-Europe trade negotiations. The upcoming ECB interest rate resolution to be announced on Thursday will become the focus of this week, with market sentiment becoming more cautious and exchange rates may maintain a volatile consolidation pattern.
Fundamentals:
From the fundamentals, the euro performed strongly against the US dollar at the beginning of this week, mainly benefiting from the market's resonant impact on the improvement of the euro zone economic expectations and the phased decline of the US dollar. However, with the release of details of the US-Japan trade agreement, the US president announced a "major agreement" with Japan, including reducing some import tariffs from 25% to 15%, and announcing that Japan will invest $550 billion in the United States. The news boosted the dollar's popularity and caused the euro to fall from its highs.
At the same time, there is still no substantial progress in trade negotiations between Europe and the United States. Although the EU representative plans to go to Washington on Wednesday to start a new round of consultations, the EU is also preparing for relevant retaliation measures, reflecting that the risks of negotiations remain. The market's concerns about the 30% tariff that may be implemented on August 1 have revived, curbing the further upward trend of the euro.
In addition, the European eouu.cnmission's July consumer confidence index, which will be released on Wednesday night, is expected to rebound slightly from -15.3 to -15, and remains weak. If there are no obvious surprises in the data, it will be difficult to provide substantial support for the euro in the short term. Thursday's ECB interest rate resolution will set the tone for subsequent market conditions. Current market expectations remain unchanged, but if the tone of the meeting is biased, it may suppress the euro's medium-term trend.
Technical aspects:
From the daily chart, the euro and the US dollar have generally shown an upward trend. Since the rebound of the low point 1.1065, the exchange rate has gradually built up a rising bottom and high point, and maintained its fluctuation on the middle orbit of the Bollinger Band and above.
The current Bollinger Band indicator shows that the middle rail is at 1.1673, the upper rail is 1.1855, and the lower rail is 1.1491, and the bandwidth is moderate, indicating that the market volatility has not converged significantly. Analysts believe that the exchange rate has entered a stage of oscillation consolidation in the short term, with the support level focusing on 1.17, which was once an important breakthrough platform in the early stage.
In terms of MACD indicators, the fast and slow lines are still running above the zero axis, but if the DIFF line passes through the DEA line to form a "dead fork", it may cause technical adjustments.
The Relative Strength Index (RSI) is currently at 59.29, in a neutral and long range, but has not touched the overbought line, indicating that the exchange rate still has some upward space. If the RSI successfully breaks through 70 in the future, it will strengthen the bull momentum; if it falls below 50, you need to beware of the risk of a decline.
From the K-line structure, the positive line has been dominated recently, the entity is full, and has a typical "broad arrangement" pattern. Analysts believe that although there is a slight retracement at present, there is still no obvious reversal signal. It is expected to continue to oscillate and consolidate between the middle and upper rails of the Bollinger Band in the short term, waiting for key events to drive the next wave of market direction.
Prevention of market sentiment:
The current market sentiment is generally cautious. Although the rebound for three consecutive days has boosted bulls' confidence, the deadlock in the US-EU negotiations and the ECB interest rate decision are imminent, making traders more inclined to wait and see strategies. Judging from the performance of popularity indicators, the long popularity of the euro has begun to cool down, and some traders are reducing their long positions in the euro to avoid incident risks.
At the same time, the announcement of the US-Japan trade agreement has increased short-term popularity of the US dollar, and some funds in the market have returned to the US dollar to hedge their safety, which also puts a certain suppression on the euro. If the EU-US negotiations break down and the ECB sends dovish signals, market sentiment may turn to conservative again.
Overall, the current market sentiment characteristics are typical of "previous major events", with risk preferences declining, exchange rates entering consolidation, and no extreme readings are available in the sentiment indicators. We need to pay attention to whether there is an emotional turning point in the future.
The above content is all about "【XM Group】: The game between long and short is becoming more intense, can the euro hold 1.17?". It is carefully eouu.cnpiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!
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