By Anton Eljwizat – The EUR rallied to a five-week high above 1.25 last week, while the dollar fell broadly after disappointing data heightened worries the U.S. economic recovery is stalling.
Concerns about euro zone debt and liquidity problems eased further on Thursday after Spain successfully sold 3.5 billion EUR of a five-year bond, adding to positive sentiment a day after European banks borrowed less money than expected from a European Central Bank (ECB) tender.
Gains in the single European currency accelerated after the EUR broke key technical resistance levels around 1.25.
As for the week ahead, the most significant news publication seems to be the Minimum Bid Rate, which is the euro zone’s interest rate announcement for July. Analysts expect the ECB to leave rates at 1.00%; however, any rate manipulations are likely to have a sharp impact on the market. Traders should also follow every publication regarding the European debt crisis as this issue continues to be the main reason for the weak Euro.
Technical Analysis
The EUR has dropped significantly versus the CHF in the past few months, and it is currently traded around 133.20. And now, as evident in the data below, the weekly chart is giving bullish signals, indicating that EUR/CHF pair might go up.
– Below is the weekly chart of the EUR/CHF currency pair
– The technical indicators that are used are the Relative Strength Index (RSI), and Slow Stochastic.
– Point 1: The Slow Stochastic indicates an impending bullish cross, signaling that the next move may be in an upward direction.
– Point 2: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the oversold territory, signaling upward pressure.
EUR/CHF – Weekly Chart
Forex Market Analysis provided by Forex Yard.
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