EURUSD News by Simon Kazinsky on 11:34 May 19, 2017 EST
The chart shows that EURUSD has broken above a moving average on the weekly chart that has held previous attempts to recover for the most popular currency cross. More importantly it will close the week above it.
This is a bullish signal that confirms previous bullish signals.
It may be tempting just by looking short term charts that EURUSD could correct after the neck breaking move this week. However, it would be unwise to pile on the other side of the prevailing force particularly when it has proven its strength by breaking above longer term resistances.
IG reports 75% of its retail traders are net short and, as usual, probably on their way to the slaughter house.
My preferred view is to build on longs on dips above 1.11, neutral all the way to 1.07 and only below that the bias would change to bearish.
For bullish targets a previous trendline that way support early in this bullish cycle could prove resistance now. It currently lies at 1.15 and, beyond that, 1.20 where EURUSD would face a moving average on the monthly chart that has provided both support and resistance in the past.
Ultimately above 1.20 would confirm we are again on a bullish cycle for EURUSD.