The American dollar opened the week under strong selling pressure, with most major yielders leaving unfilled gaps, as diminished fears of the UK voting in favor of leaving the EU in the upcoming referendum, have trigger a shift in market’s sentiment. Over the weekend, the first poll taken after the shooting of Jo Cox, showed that the intention to vote “remain” is gaining ground, up to 45% against the 42% of the “leave.”
The EUR/USD pair advanced up to 1.1382, but settled below 1.1360, the 50% retracement of the May’s decline, and trades a few pips below it, back into consolidative mode. Data coming from Europe, showed that German PPI improved in May, up by 0.4% compared to April 0.1%, whilst on a year-on-year basis, prices declined by 2.7%, better than the previous -3.1% but still in the negative side.
The 4 hours chart for the EUR/USD pair shows that the upside strength is limited, given that the technical indicators have turned modestly lower above their mid-lines, although the price is well above its moving averages. Sunday’s low was set at 1.1308, and a break below it can see the pair finally filling the weekly opening gap at 1.1270, particularly if local share markets maintain their strong bullish tone.
A candle opening above 1.1360 on the other hand, should favor a new rally towards the 1.1400/20 price zone, en route to the major static resistance at 1.1460.
News Source: http://www.fxstreet.com/