The euro is on the rise with the greenback this week. “The single currency developed an upward impulse against the dollar on Monday May 18 on the foreign exchange market, a rebound from the technical support defended for several months at 1.0775-1.08 dollar”, notes Vincent Ganne, member of the ” French Association of Technical Analysts (AFATE) and Market Analyst and Business Development Manager at TradingView. Let us recall the fundamental factors which allow the single European currency to hold up despite the massive recession which the Euro Zone entered.
The primary reason for the stability of the euro since the start of the year is not European. “It is above all the American will not to see the market tend towards the parity 1 euro for 1 dollar, which would be an important commercial handicap for the international trade of the United States. Who buys under 1.08 dollar for several months; and even more in recent weeks? The Federal Reserve is probably the right answer, “said the expert. The recent rebound in the euro dollar, however, is due to the Franco-German aid plan. This is a 500 billion plan “In the form of debt contracted by the European Commission, which will thus be able to make allocations to countries in difficulty, it is therefore a European pooling of risks. But nothing is for granted, the States and Parliaments have yet to ratify this plan in June, it promises to block in certain countries ”, warns Vincent Ganne…
What does technical analysis say?
With regard to the technical structure of the euro dollar rate, “let’s not look for noon to 2 pm. It is a trading range (horizontal price fluctuation interval) delimited by technical thresholds which are part of long term charts, and plotted on the daily chart below. The market oscillates between the major support at 1.0775 dollars and the strong resistant zone of between 1.10 and 1.11 dollars. This framework should continue over the next few weeks ”, judge Vincent Ganne.
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