Euro-Dollar Rate Crosses its Rubicon, Next Target in mid-1.12s

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- Break above 1.1100 a game-changer

- Next target in mid 1.12s

- Brexit progress driving pair higher

The Euro-to-Dollar rate is rising due to easing Brexit risks and it has now crossed an important rubicon into more bullish territory, says Richard Perry, an analyst at FX Broker Hantec Markets.

“The Euro had been stuttering in recent sessions, but has taken another shot in the arm with progress in the Brexit process,” says Perry in a note to clients.

The announcement of a deal between the UK and EU has further solidified gains and led to the exchange rate rising up to its current level at 1.1117.

The break above 1.1100 now suggests the pair may be in a medium-term bullish trend, according to Perry.

1.1100 is the “real test” for the pair, and if Thursday’s close stays above the level it would be a very bullish sign.

Perry says 1.1100 is an “old low from April/May” which “became key resistance throughout September and would be a signal for a crucial shift in euro sentiment. It is the first key lower high and a breach would confirm that a new positive medium term trend would be developing.”

Momentum indicators are supporting a continuation of the uptrend and intraday weakness is now a chance to buy.

“This improvement is reflected in the momentum indicators, with RSI into the 60s and multi-month highs. MACD lines are accelerating higher towards neutral and Stochastics are above 80,” says Perry.

As far as the next bullish phase goes, a decisive close above 1.1100 opens the way to the next target at 1.1160 and “more importantly 1.1250”.

If the pair slides back down, however, it is likely to find support in-between 1.1020-1.1060.

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