EUR/USD Weekly Analysis 22 May 2017 – The Euro Gathers Momentum

A combination of Euro strength and Dollar weakness has created a very strong trend for the Euro. This is now prompting dollar bulls to get out of their positions, which adds to the trend.

Before we have a clear idea of where the Euro is headed in the long term we will have to see a test if 1.16, and so price action in the short term will be targeting that level.

(EUR/USD Weekly chart – The Euro needs to test the top of the range)

Right now, the best strategy is to buy dips with a target of 1.1374, but we may have to wait for a bigger correction to 1.0875 to set up a really profitable, high probability trade.

(EUR/USD 4-Hour Chart – A clear medium term target at 1.1374)

There are a lot of speculative Euro longs in the market, and plenty of leverage is being used. That means a correction may be severe, so traders must obey their stops in this environment.

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About Jessica

Jessica has been a trader in the forex market for the last decade. She specializes in technical analysis and writes for several forex blogs about the topic.