The EUR/USD Rate Touches New High in 2020 as RSI Gains Upward Trend
As of August 2020, the market conditions indicate that the Euro vs. US Dollar exchange rate will stay high owing to the upward trend registered by the Relative Strenght Index (RSI) of these currencies. The RSI for March indicates the EUR/USD rate will sustain its high range during the third fiscal quarter of 2020.
From early-August, the EUR/USD rate started at $1.1696. The current market conditions are likely to keep this exchange rate high and have the RSI continue its upward trend. The EUR/USD rate in 2020 is set to approach a new high by re-tracking its pullback $1.1916 registered early this year. Last week, the RSI showed usual signals that the recent EUR/USD exchange action would come more under 70 points.
The RSI also indicated that the EUR/USD behavior may face exhaustion and is likely not to impact the trend of oscillation when the rate returns to its previous trendline support.
In the coming months, the RSI will unfold whether or not the EUR/USD rate will bounce forward concurrent to its trendline support. As the crowding US dollar gained persistence, the EUR/USD behavior was seen bounce along the trendline in July. With the upcoming European Central Bank (ECB) meeting, things are less likely to sidetrack the expected appreciation in the EUR/USD exchange rate. The Governing Council is not in a hurry to change the course of EUR/USD monetary policies.
The uncertainty also looms over how the ECB could retain its current policy throughout 2020, mainly when fiscal authorities are ready to deploy a €750 billion recovery fund for COVID-19. ECB President, Christine Lagarde, is likely to keep the current EUR/USD rate afloat and let the US dollar continue with its crowding behavior throughout August.