EUR/USD -27/8/2023-

• Technical long term picture for the Euro/Dollar pair is a bit mixed at the moment and at a critical area
• The yearly rally from 0.95 to almost 1.13 represents the 61.8% retracement level of the 2021 decline from 1.22 to 0.95
• The above statement gets us wondering whether the 2022-2023 rally is a trend reversal and bullish trend or just a correction of the preceding decline
• On the other side, there is an ascending channel and a higher highs higher lows identified since early March and it is still intact despite the recent drop
• The bottom trend line support of the channel along with the previous swing low around mid 1.06s are very critical in this scenario
• A break of the channel and the support level highlighted on the chart (1.0640) confirms a deeper decline and a break of the high lows series which invalidates the up trend
• Further below there is a strong support around 1.05 followed by 1.0220
• If the bullish trend were to persist and the series of higher highs stay intact, we can expect a move up to 1.14-1.15 levels
• What might trigger such dramatic moves is the jobs report in the upcoming week, inflation data in the coming weeks and any hint of a prolonged pause or surprise hike by any of the ECB or the FED