Charts of the Week - EUR/USD at parity for the first time in 20 years.

EUR/USD – EUR/USD at parity for the first time in 20 years.

• Resistance Zone: 1.056 to 1.058
• Key Resistance: 1.042
• Major Pivot Point: 1.018
• Key Support Level: 1.00
• Support Zone: 0.9900 to 0.9880
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• CBOE VIX – Volatility Index @ 26.82 -0.47 (-1.72%)

Trade Insights – EUR/USD

The chart shows Viable long positions above the Key Support Level at 1.000. With the first target of the Major Pivot Point 1.018 and after confirmation above the Pivot, further long positions towards the Key Resistance level at 1.042 and then test the Resistance Zone at 1.056 to 1.058

Alternatively, Short positions below the Key Support Level at 1.000 with the target to head towards the Support Zone at 0.9900 to 0.9880.

EUR/USD Chart Analysis:  Directional bias - 2 Weeks 

EUR/USD has continued its longer Term Down Trend. And it is now trading at the lower limit of the descending parallel Channel. The pair is trading below all the major SMAs including the 20, 50, and 200 Day SMAs. And the Stochastic indicator is in the oversold category. The pair is trading at the bottom end of the parallel channel just above the key support level at 1.000 and it could appear that the EURUSD is trading just at the bottom but quite possible the bottom is not reached yet. The pair touched the support level at 1.00 on the 12th and 13th of July. It is the first time the Euro and Dollar came to parity in 20 years – meaning the two currencies are worth the same for now.

If the pair continues to fall then we could reach a situation where the euro is trading below the US dollar at a range of $0.95 to $0.97. If the Support zone on the chart is broken then the bears could push the prices all the way down to the 0.9500 level. This could mean more global economic instability.   

Fundamental Overview

The Dollar index DXY is trading at 108.31 and has set another fresh 19-year high on the back of a 9.1% CPI print yesterday. The US dollar is relentless and has continued to climb higher, along with CPI data the weak EUR has also played a large part in this. The Euro is down by about 12% since the start of the year.

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