Daily Comment

Daily Comment,

The upward trend of the EURUSD continues after a movement that started on Wednesday with the publication of the ECB minutes from the december meeting.

The single currency managed to break the 2017 highs at 1.2090 after the agreement reached in Germany to form a new government. The positive data published on Friday in the United States of inflation, a tenth higher than expected, and the upward revision of the retail sales did not support the dollar doing three years low at the American close for the DXY Index, and with the EURUSD breaching the 1.22 level.

Note that the movement is weak USD and not so strong EUR, as can be seen in crosses such as the EURGBP which maintains the levels of last week or against crosses such as AUD or NZD that have corrected, but are still far from the december highs.
The GBP was also strongly demanded against the USD, with levels not seen since the night of the Brexit, breaking the last year highs at 1.3660.
Finally the USDJPY, which also has drilled the low of november last year with the gazes placed on the psychological barrier of the 110.

Part of the weakness of the American currency comes from the movement of the Chinese Yuan that continues to appreciate returning to two-year highs. Measures adopted last week, seemed aimed at stabilizing the currency, finally ended the week with a rise of 2%.

USDCNH vs EURUSD (Inverse) - great inverse correlation

German Weidmann's statements at the end of the European session on Friday, which justifies a gradual withdrawal of stimulus, but noting that the upward movement in rates is still far away, seems a message intended to try to reduce the strength of the euro, and lower expectations with some analysts anticipating the first rise of the ECB by the end of this year.
These levels of the European currency could cause some concerns and see a more aggressive language from the members of the monetary authority to avoid a quick appreciation.

Technically the break of the 2017 highs would lead us to the long-term bearish trend in the area of ​​1.25 / 26 now becoming 1.20 in the important support.

EURUSD Weekly - long term downside trend 

Today, bank holiday in the United States, we have a session without relevant data.

Long USDCAD at 1.2435 - TP 1.2750 - SL 1.2350
Short USDJPY 112.90 - TP 110.25 - SL 114.25


Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria