EUR/USD – Breakout or Not?
Posted on October 14, 2009 by Yohay
Filed Under Forex Opinions | 8 Comments
EUR/USD climbed above the 1.4844 peak that it reached three weeks ago but didn’t get far away. 1.4908, just above it, was a peak at the beginning of the year. Did EUR/USD make a breakout and is doing it slowly? Or did it just get closer to the resistance line, where it can bounce back down?
EUR/USD enjoyed the dollar’s weakness on Tuesday and managed to trade above the peak of 1.4844 that was reached on September 22nd.
This came despite bad fundamentals: the important ZEW Economic Sentiment fell both in Germany and in all of Europe. Economists were expecting a better sentiment this time.
After climbing above 1.4844, EUR/USD traded just under 1.49. Casey Stubbs and Mohammed Isah both see 1.4844 as an important resistance line, and see the move as a breakout. They both have interesting technical analyses I recommend reading.
But I think differently. I see the 1.4908 line as more important. When EUR/USD began tumbling from above 1.60 last summer, the first attempt to go back up was stopped at 1.4908. It then fell up to 1.3880 before making a second attempt after Lehman’s collapsed, and it also bounced near that spot.
The second reason for looking at 1.4908 as the more important line is the character of the last breakout: it wasn’t convincing. EUR/USD. The initial rise to 1.4876 was followed by a fall to 1.4800. The next move was also slow.
The third reason for looking at this line is today’s trading: European Industrial Production rose by 0.9%, exactly as expected, and didn’t influence EUR/USD. The peak today was at 1.4913, at the resistance line. Since then, EUR/USD is stuck. I see it “stuck” under the resistance line.
I guess that there are more opinions out there. What do you think? Did EUR/USD make the breakout, or did it just get closer to the resistance line, where it can bounce back?
For further reading: check out the EUR/USD Weekly Forecast.
Enjoyed the post? You may want to subscribe by RSS feed or Email.Tags: Casey Stubbs,EUR/USD,Industrial Production,Mohammed Isah,resistance line,Technical Analysis,ZEW Economic Sentiment
Comments
8 Responses to “EUR/USD – Breakout or Not?”
Leave a Reply
Popular Forex Posts
Daily FX Headlines- Forex Strategy Corner: Bollinger Bands Techniques for Trading September 2, 2010
- EUR/USD: Trading the Change in U.S. Non-Farm Payrolls September 2, 2010
- US Dollar Forex Options Sentiment Points to Pullbacks September 2, 2010
- The FX Market has now Entered the Pull of Friday NFPs September 2, 2010
- British Pound Forecast to decline Against Japanese Yen September 2, 2010
-
Stay up to date!
-
-
I’m indifferent about E/U at the moment. I’m a bit on board with you here. It surpassed the Golden Ratio on the Weekly chart after looking as it was going to start dropping. However it continues to increase. I am under the impression that if it doesn’t start to plummet by the end of October, it’s likely to continue upwards.
[...] is now trading at 1.4940. EUR/USD managed to break another resistance line.The ECB Monthly Bulletin is due to give a broad view of the [...]
Thanks for your comment Shawn.
[...] Looking at the most popular pair, EUR/USD, we can see that it’s also close to the yearly peaks achieved on Thursday morning – 1.4867. It now trades at 1.4950. The round number of one and a half euros for one dollar is very close. I’m now convinced that EUR/USD made a true breakout. [...]
[...] In Europe, Trade Balance is expected to show a smaller surplus – 5.1 instead of 6.8 billion. EUR/USD is again under 1.49, erasing the resistance line. [...]
[...] PPI will start the European figures this week. After passing the resistance line of 1.4908, will EUR/USD move up to [...]
[...] made another step towards 1.50 this week, breaking a resistance line. This week, PMI numbers dominate its calendar. Here’s an outlook for this week’s events [...]
Thanks. eur/usd is targeted to hit 1.5100. watch out