EUR/USD is on the move, trading some 80 pips higher on the day and at the highest levels since November, a six-month high. The pair is flirting with the resistance level of 1.1050, which served as support back in August.
More importantly, the pair is reaching the top of the uptrend channel. Since the very beginning of 2017, the pair has been making higher lows and higher highs. From the trough of 1.0340, we have seen the gradual uptrend.
And today, this uptrend channel stands at 1.1060. Will it make or break?
Here is the chart, and it is followed by the arguments for a break higher.
Fundamentals support a break
EUR/USD is at the highest since Donald Trump was elected. And the latest Russian scandal is one of the 5 reasons for the break higher in EUR/USD.
Some doubt the President’s ability to govern. While the issues about Russian involvement in the elections or handing classified information to Russia on ISIS do not interest markets on their own, these distractions divert the attention from any reforms.
Politics in the euro-zone is in a better place, at least for now. The new French President Emmanuel Macron is pro-market and his meeting with German Chancellor Angela Merkel was successful.
Also, the economic fundamentals favor the euro: the euro-zone economies. The euro-zone economies grew at a faster rate than the US economy.
Doubts about the next US rate hike are countered by hopes for the end of QE in the eurozone.
So, the fundamentals support a technical break above the channel.
What do you think?
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