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Disunity in EU
Yesterday, the most popular currency pair on Forex moved higher once again. I decided to check both weekly and monthly time frames, given that today is Friday. The monthly chart looks quite bullish to me, and on the weekly chart, the bullish engulfing candlestick pattern may appear if the euro bulls manage to maintain their positions. In one of my recent articles, I noted that the US dollar is about to face some serious problems against its major rivals. So, this is exactly what is happening at the moment. In some currency pairs, the weakness of the US dollar became very obvious. Yet, the fact that the US currency was gaining ground across the board a few days ago implies that the price may be swinging at this stage. It is clear that the aggressive hawkish policy of the US Federal Reserve has already been priced in by the market. However, a full-fledged reversal against the US dollar is highly unlikely now.
Honestly, the situation in the European Union seems very ambiguous to me. Sweden and Finland applied for membership in NATO, but the alliance does not provide them with a fast track although these are one of the leading European countries. Meanwhile, Hungary is demanding compensation from the EU for its refusal of Russian energy imports. Other countries may also want to follow the lead. I would like to add that the EU has never actually had full unity and solidarity within its members. Much of what is happening now in the EU is due to their disunity. But this is a different story. Now let's move to the technical analysis of the EUR/USD pair.
Daily chart
Yesterday, the euro/dollar pair showed quite impressive growth. The quote returned well above the psychological level of 1.0500, and the pair closed the session on Thursday at 1.0583. Thus, the euro bulls may attempt to break through the strong and important resistance at 1.0590-1.0641. If today's trading ends above 1.0641, where the blue Kijun line of the Ichimoku indicator is located, bullish sentiment for the pair will increase significantly. Strong support is found in the area of 1.0480-1.0460, where the red Tenkan line and the lows of May 18-19 are located. Only consolidation below the level of 1.0460 will signal the resumption of the bearish scenario. In the meantime, the pair is heading upwards, ready to conquer new highs.
H4
On the four-hour chart, there has already been a slight correction against yesterday's rise. Yet, the penultimate candlestick with a long lower shadow signaled that the corrective pullback has come to an end and the pair is ready to resume growth. In an aggressive approach, you can try to buy EUR/USD from the current levels. It is less risky to buy the pair a bit lower, near 1.0565. Going short is also possible and looks good from the technical viewpoint, especially on a breakout of the resistance level of 1.0641. As you can see, the orange 200-period exponential moving average is located at 1.0657. It will serve as additional resistance at the level of 1.0641 and will help limit the uptrend of the pair. That's all for today. As unusual, on Monday, we will analyze the results of the week. I will mention once again that according to the technical picture, EUR/USD is likely to rise.
Good luck!
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