Today, on May 27th, the US Dollar is losing value against the common European currency, which means that EURUSD is up from yesterday's lows after the European parliamentary elections that took place at the weekend.
At the beginning of the European trading session, EURUSD gained 0,21% and is currently trading close to 1,3655.
Yesterday, on may 26h, the common currency showed some weakness against the US Dollar after the election results were announced. Still, the trading session was completed in the green zone as the common currency managed to regain the lost ground.
If to take a closer look at the lection results, we will see that anti-EU parties won the lections in Denmark , France and the UK while pro-EU parties lost the elections in most other countries. The only countries that saw pro-EU parties win are Spain , Greece and Italy.
Still, experts believe that the growing popularity of euro-skeptics is unlikely to lead to immediate changes in the ECB's policies since 70% of the parliamentary seats will belong to traditional European parties, which support the EU as an economic and political formation.
Apparently, most traders sold the Euro in favor of the US Dollar in advance of the elections in order to avoid unnecessary risks.
Yesterday, Mario Draghi expressed his and ECB's concerns about tougher lending conditions because of a stronger Euro. This statement made most market participants believe that the European Central Bank is likely to start easing its monetary policy further in June.
Draghi also believes that the eurozone's consumer activity may decline amid expectations of lower inflation. According to Mr. Draghi, the ECB is currently considering the effect of a wide range of measures on the European economy. Those measures rare aimed at increasing the rate of inflation to make it match the 2% target.
FOREX
Meanwhile, the bullish reaction of EURUSD currently seen in the market is likely to hold true for some time amid the stabilisation of the bonds issued by debt-ridden peripheral European economies as well as their stock markets, some experts assume. They are currently seeking points to seel the Euro.
The Euro rally was backed by Germany's GfK consumer price index, which matched expectations. This indicates stabilization in terms of consumer confidence in the eurozone's biggest economy.
Today's events to watch are US HPI, consumer confidence, manufacturing indices (by the Fed Dallas and the Fed Richmond).
According to Masterforex-V Academy, the currency pair has a bearish bias at this point. If to consider the period from May 15th, the H1 chart of EURUSD indicates a bearish move from 1,3733 down to 1,3614, which ended up with a recovery. The recovery is being defended by the MF sloping channel that is marked blue in the chart.
Today, te price binned through the channel to question the strength of the common currency. If the price consolidates below the sloping line of the channel, we are likely to see a drop down to 1,3635. At the same time, a break and consolidation below it will give way to 1,3614 – Monday's low. The scenario is marked red.
At the same time, the bullish recovery may continue of the price break above 1,3669 – the local high of today's Asian session. If this is the case, the next target to watch is 1,3688 – Thursday's high. The scenario is marked green.
According to the Binary Option Department of Masterforex-V Academy, sales look more tempting for now. This means it is worth buying put options. Expiration is 1 hour or so.
