At the turn of the year, it seemed that the EUR/USD pair could at least make a stronger correction of long-term decreases. The main motivation for such an approach would be the hesitation of the American FED and withdrawal from the announced rate increases or a slowdown in this process, i.e. depriving the dollar of the main reason for its earlier strengthening. While the market got used to the new situation in the USA quite quickly, the old economic problems returned for the euro. There are opinions from the United States that the economy is doing well, while from Europe are rather opposite. Yesterday, the head of the European Central Bank admitted that the economic slowdown may take longer than expected, and this means that the ECB may need further action. In practice, this limits the chances of raising interest rates in the euro area in the near future and adversely affects the valuation of the euro.
In the EUR/USD daily chart, there is not much left of the breaking the downward trend line. All in all, the breakout has not led to a significant change in the balance of power, the pattern of lower and lower extremes is still valid. The whole recent upswing is not very dynamic and fits into a growth channel, which may turn out to be a typical flag formation, from where lowering the flag may mean a return to the main trend.
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