EUR/USD: Weekly outlook 21 - 25 August 2017

EUR/USD: 21.08.2017

Our expectations: We expect a correction close to 1.16 for new long positions with a SL at 1.1525.

Alternative scenario: Breakout below the diagonal support and a price remaining there (at least 3 closed bars) will spoil the bullish scenario and give the short positions meaning.

Comment:

Uptrend and forming a "Wedge" formation.

We are waiting for a price close to diagonal and horizontal support for better positioning around 1.16 - 1.1620.

At these levels there is a dynamic support from Fibonacci 50% and the price will be close to the MA50.

Reaching the entry price will lead DeM (14) to an oversold zone and a reversal below 0.3 will confirm the likelihood of upward movement.

Fundamentals: The dollar is quite oversold, and the probable caution in anticipation of the Jackson Hole Symposium makes a short-term consolidation possible. Expectations for the euro remain very positive, but in the short term we see a decline in net long positions, which creates expectations for a slight correction. At the Symposium we will watch Draghi's statement closely, with various sources rumored that he will again refrain from commenting on the ECB monetary stimulus cut.

Trader Nikolay Georgiev

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