Euro Is Back Into Parity with USD, So What’s Next For the Greenback?

This could be a big week for the euro as it trades back above the 1-for-1 parity level with the US dollar on Wednesday – its first time in six weeks. A few technical signals suggest it could soon grow even stronger, making this a crucial week for the future of the euro.

The euro has just moved decisively above both its long-term descending trend channel (downward sloping white lines), and its 50-day simple moving average (yellow line), having been stuck below both since February. And if it begins trading for more than $1.005, the chart suggests we could see an even steeper move higher.

It’s also about dollar weakness. Yields on the benchmark US 10-year Treasury have been sliding, and that narrows the difference between what investors can earn investing in US bonds versus EU ones, and that’s had investors selling off dollars in favor of euros.

On Thursday, the European Central Bank (ECB) is expected to announce a second 0.75 percentage point interest rate hike, raising its key rate to 2%. This could make the euro even more appealing. Even more important will be what the ECB says about future monetary policy moves.

If you’re bullish on the euro, going long on EUR/USD is one way to expose yourself to the trading. In the meantime, you can also put more funds into strategies like Athena EA or Portfolio ECS that actively trade the pair. 

Finally, you can get fresh ideas on British Pound, Dow Jones, Gold via a premium signal service (telegram-powered at the moment), which we are keeping open for free (usually $109/month) throughout October. 

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