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The sentiment of the market felt better this morning by saying that Italian politicians have agreed to reduce the budget deficit next year. As a result, safe haven currencies declined, while risk currencies increased this morning.
The EUR / USD has paved the way today since it is the main currency involved in this little war between the European Commission and the Italian Government. This currency pair climbed about 60 pips from the lows of the night.
We saw this as a good opportunity to approach EUR / USD and open a forex sell signal. Chart H1 is well overbought, as shown by the stochastic and RSI indicators, while the main trend is still bearish. In addition, a number of moving averages outweigh the price, which will provide resistance to EUR / USD buyers.
So, the retrace is over. On the other hand, the main problems that remain for the euro, such as Brexit and a slowing economy, as shown by the recent economic data of the euro area. The President of the European Central Bank (ECB) will deliver a speech this afternoon and he should recognize the recent weakness of the euro.
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