EUR/USD still has power to continue the rally

The dollar is extending its decline on Monday, resulting in EUR/USD hitting 1.1764 during European trading hours. Currently, the pair is trading in the 1.1740 price zone, barely easing from the mentioned multi-month high despite being overbought but with no technical signs of upward exhaustion, FXStreet’s Chief Analyst Valeria Bednarik briefs.

Key quotes

“German’s IFO Business Climate report resulted above expected, printing at 90.5 in July, although the assessment of the current situation was slightly worse than anticipated. Expectations, however, jumped to 97.0 from 91.4. The US published June Durable Goods Orders, which were mixed. The headline number was slightly better than anticipated, as it resulted in 7.3%, although Durable Goods ex-defence rose by less than expected, as well as orders without ex-transportation.” 

“Technical indicators in the 4-hour chart indicate that the pair is overbought, but besides being in extreme readings, there are no signs of upward exhaustion or an upcoming U-turn. Moving averages, in the meantime, continue to head firmly north well below the current levels.”