EUR/USD Forecast: German political breakthrough open way to $1.2170, $1.2600 next
|The EUR/USD has been boosted massively in last two trading days by political and economic news that supported the Euro’s rise to the highest level since December 2014. Busting $1.2100 level earlier on Friday opens the way for EUR/USD to target $1.2170 next.
First, it was the minutes from December ECB meeting that supported EUR/USD revealing the willingness of the Governing Council members to modify its extremely light monetary policy in an environment of broad-based economic growth and improving economic outlook for the Eurozone.
This morning it is political news of the German political parties reaching breakthrough agreement on forming a so-called Grand coalition that has lifter EUR/USD above $1.2100 for the first time in more than three years.
Having been for three years below $1.2100 level, it takes the broad picture to analyze the potential for further moves. From the long-term perspective busting the 1.2100 level open the way for $1.2170 representing 50% Fibonacci retracement of the slide of EUR/USD from $1.4000 to cyclical low of $1.0350.
With technical oscillators including Momentum, the Relative Strength Index and Slow Stochastics all pointing upwards, the potential of moving towards the targeted $1.2170 is in place, especially as the next target is in sight of current spot rate.Should $1.2170 be broken on the upside, next target for EUR/USD is $1.2600, representing 61.8% Fibonacci retracement of the above-mentioned move lower to $1.0350.
EUR/USD daily chart
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