After settling in the middle of a higher range, EUR/USD is now making an upwards move and breaking above the 2012 high of 1.3486. This line has been a clear separator of ranges in recent weeks, as the graph shows. This break still needs to be confirmed.
The main reason for the euro’s rise is the general notion that the G-20 Summit will not try to curb excessive currency movements – it will allow Japan to continue its policy, even without a minor “slap on the wrist”.
The statement coming from the G-7 didn’t mention Japan, and later received a “clarification” that it did warn about Japan’s moves. Other reports just left us with a sense of confusion about world leaders’ intentions. When confusion is all around, Japan can purse its policies and Europe can “lose” the currency wars.
If the break is confirmed, the next line is somewhat far: 1.3588, followed by 1.3610. On the downside, the round number of 1.34 provides support, followed by 1.3350 which is much stronger at the moment.
For more, see the EUR/USD forecast.
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