To the surprise of many, the EURUSD pair started the trading week, gapping higher at the opening. The surprise comes from the fact that Germany, the largest Euro area economy, announced over the weekend that it enters a full lockdown until after the December holidays due to the fact that the light one failed to curb the COVID-19 infections.
However, this meant nothing for the EURUSD as it opened higher mostly due to the news that the negotiations between the United Kingdom and the European Union regarding Brexit will continue. Once again, the market shows the importance of Brexit, or maybe the market participants already focus on the Fed’s decision due in a couple of days from now.
EURUSD Technical Analysis
The pair seems to have formed a double top during the December NFP release. From that moment on, all the dips have been bought aggressively. At this point, the price action remains bullish. However, until the price manages to push above the black line, expect the bears to keep trying.
As such, the pair offers both bulls and bears something to trade. Bulls may want to wait for new highs and ideally for the market to close above the black horizontal line. If that is the case, they may want to go long with a stop at the blue line and a reward twice as big as the risk. On the other hand, bears may want to short a break below the blue line, with the same risk-reward strategy – stop at the recent highs and a rr ratio of 1:2.
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EURUSD Price Forecast
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