#EURUSD is seasonally bullish through December but will the current downtrend reverse?
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EURUSD Seasonal Trend
The EURUSD is seasonally bullish through December which could offer us some long opportunities. As you can see from the chart the Euro has one of its best months in December and the USD has one of its worst. Not only this but the strength meter is currently suggesting the USD is in a reversal zone as it is the strongest currency.
The only risk to this trade currently is the recent news of a new Covid variant. If this turned out to be significant we could see further risk off sentiment which could lead to USD strength in the short term.
Looking at the chart we can see on the left hand side the weekly time frame is in a strong downtrend. However, last week’s bullish close could lead to a retracement of the weekly trend. This will agree with our seasonal bias of a long EURUSD. If the weekly is going to enter a retracement phase on a weekly downtrend we could look for an uptrend to form on the lower time frame. The 4hr chart has already shown signs of a reversal as the price has broken the trendline resistance. We have also seen the price form a new higher high pattern. If the price retests the 4hr lows we can look for long opportunities in line with the trend. Alternatively if the price can break through the weekly highs we should see strong buying momentum follow.
Missed out week ahead analysis? You can see it here.
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