ECB talk of ending negative interest rates by Q3 with the possibility of positive rates in the not-to-distant future has got EUR/USD all fired up after what has been an abysmal year in terms of performance. The recent consolidation in short-dated US yields have also lent their support to the single currency, which surpassed the prior 5 May 1.06420 swing high on Monday. Has EUR/USD really switched from downtrend to uptrend?
Perhaps, but you may want to wait for more confirmation that things have changed, before raising your convictions. For one, no matter the higher time frame, be it daily or weekly EUR/USD is well below its 200 exponential moving averages, which are still downward sloping. Were price to surpass the last March weekly swing high of 1.11849, I’d certainly have a lot more confidence that something big is brewing.
