Dear fellows, today I would like to provide you with a short article regarding the long-term perspective of the most traded currency pair – the EUR/USD cross. I have decided to provide an outlook based on a monthly basis chart. The reason behind my pick is very simple. The monthly chart incorporates all fundamental aspects for a particular pair purely by looking at its technical structure as it excludes the noise around some news releases.
We can easily spot that the pair has been in a rapid downtrend since it hit 1.4000 and the single currency found a media core support at 1.0470. A lot of people expected a strong rebound and 50% retrenchment up to 1.2400. However, this is not the case. What we see on the monthly chart is a tight range pattern locked between 1.0470 and 1.1725 which has already been confirmed as a major resistance zone.
Moreover, the price action is strongly supporting the bears as we spot on the monthly bars huge shadows pointing up. From a technical perspective, the range pattern is a trend continuation structure and the downtrend should be resumed if the prices break below 1.0450. The mid-term target is the level of parity which is very likely to be pushed as well opening the path towards the initial range pattern target – the support zone at 0.9500.