KEY POINTS OF THE ARTICLE:

• The technical analysis of the euro dollar rate always describes a possible short squeeze scenario if the resistance at $1.20 is overwhelmed.
• The monthly technical close of the EUR/USD rate is bullish.
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Euro dollar chart with TradingView platform

THE TECHNICAL ANALYSIS OF THE EURO DOLLAR STILL DESCRIBES A POSSIBLE SHORT SQUEEZE SCENARIO IF THE RESISTANCE AT $1.20 IS OVERWHELMED.

International capital returns to the shares of the EuroZone, it is the teaching of data of "inflows" published every week by the European management. First of all, there is a logical mechanical effect in favor of the appreciation of the Euro, because it is the currency of quotation of the european zone shares. But let us recall the technical context of the euro dollar rate: since the beginning of August, the market has been stuck to the long-term bearish trend at $ 1,1950 and it is a kind of accumulation phase that is being built, without the price being given the signal of bullish technical break at this stage.

In order to give such a technical signal, it takes very powerful fundamentals, a conjunction of several bullish engines. And this is where the strong return of European equities comes in because it could be the new market data that breaks the resistance of $ 1.20, opening the way to $ 1.2150 and then $ 1.25.

The dominant technical factor in the foreign exchange (Forex) market this year is the fall of the US dollar against a basket of currencies, against a backdrop of soaring money creation in the United States.

Long-term EUR/USD rate chart – source TradingView

THE MONTHLY TECHNICAL CLOSING OF THE EUR/USD RATE IS BULLISH

I returned in my previous article to the fundamental reasons for the rise in the euro dollar rate in recent months. I will now highlight here the bullish monthly technical close for the EUR/USD rate, which exceeds the resistances of the long-term bearish trend. The overshoot is certainly marginal, so it should be confirmed by exceeding the resistance at $ 1.20, thus giving the signal of a rise towards $ 1.2150.