The Euro depreciated due to market risk and stock turmoil mainly due to the Coronavirus epidemic. On the contrary, the depreciation of the Euro was minimized by the ECB's monetary policy which has indicated its intention to remain favourable for as long as it takes, which is yet another factor that will help the Euro to appreciate. On the other hand, the US dollar remains overvalued compared to the purchasing power parity of about 1.2900. However, what is noteworthy, is the interest rate differentials against the Euro that have declined over the last period.

The EUR/USD remains under pressure and the possibility to depreciate is very likely (at about 1.1000/40). The first resistance is found at 1.1207 and 1.1343 respectively. A break above the 1.1343 could possibly push the pair as high as 1.1456. In contrast, the first support is found at 1.1037 and 1.0887 respectively. If the price breaks below the 1.0887 level, it could possibly force the pair as low as 1.0802. The RSI (W)remains at the neutral to negative territory and the CCI (W) closed at the negative territory.

Source: Exclusive Capital

 

What Is Relative Strength Index – RSI?

The relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100.

 

What is the Commodity Channel Index (CCI)?

Developed by Donald Lambert, the Commodity Channel Index (CCI) is a momentum-based oscillator used to help determine when an investment vehicle is reaching a condition of being overbought or oversold. It is also used to assess price trend directions and strength. This information allows traders to determine if they want to enter or exit a trade, refrain from taking a trade, or add to an existing position. In this way, the indicator can be used to provide trade signals when it acts in a certain way.

 

Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Capital is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

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Christos Nikolaou

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