It was after ECB President Draghi’s speech, a very dovish tone that somehow got turned over which caused the euro to rally, and due to the political warfare back in the White House that is causing the dollar to depreciate. The rate has recently hiked in June so there’s also not much reason for why the dollar should appreciate now.
So, if you look at the W1 chart, the ceiling that kept the pair going sideways for the past 2 years or more has finally been broken.
Given the current fundamentals, the euro is likely to gain further as tapering may happen very soon due to a lack of purchases for the QE to sustain. Putting this chart together, we have to believe that there’s a long way for the euro to continue its current appreciation, and with very little retracement.
It is also for the first time that the bollinger band was widened till this extent, signaling for higher volatility to come and in this case, it has to be a bullish one.
We can also see that the bollinger band has all its lines pointing upwards. It has started ever since the price had broken above a major rising trend channel, creating a new and steeper rising trend channel.
You probably noticed it as well – price just hit the top of the rising trend channel, which also means we are about to experience some retracement, or at least a short pause before it goes any higher.
We can’t be too sure either. It can open high on Monday or it could just burst and broke the top of the rising channel, but it’s definitely worth observing its movement and find an opportunity to ride the next wave of appreciation.