In the last thirteen years the US currency has followed a long but sustained path towards parity with the Euro, from the $1.60 registered in July 2008 to the $1.034 in January 2017, there was a strong approximation of the two main currencies in the system, with the pair now in the perspective of being able to revisit the $1.40 level or as an alternative to break the lows of four years ago and touch equality. In technical terms, the primary scenario is a possible validation of a Cup & Handle pattern with the objective at the $ 1.40 level I mentioned, while on the reverse side the opportunity may arise if you end a month below $ 1.07, which would validate the break in the trend line that started in October 2000, when the pair reached $ 0.837.
In the fundamental component, the board is monetary policy, namely the future of asset purchase programs in the medium term and interest rates in the medium and long term. In this regard, the USA is clearly ahead of Europe in terms of the normalization of monetary policy, namely the reduction of the amounts acquired every month, and there is also a feasible visibility scenario for the increase in interest rates, while that of the ECB the evidence given is for a long way to go to that level. This means that while in the technical analysis the outlook is likely to be bullish for EUR/USD, in the fundamentals the probabilities are inverted.
