The single currency is defying the recession and continues surging forward, as doubts about debt decrease. EUR/USD broke above the round 1.35 line and is now trading at around 1.3515. The break above 1.35 followed a break of the 2012 high of 1.3486. Here are the next levels.
Note that the pair also broke above the uptrend resistance line, at least on the hourly chart. EUR/USD previously respected this line.
1.3550 was a peak in December 2011 and is the next immediate level. Above, 1.3610 was a swing high in November of that year. Moving higher, 1.3690 provide some support to the pair when it was trading on high ground in the fall of 2011.
The next level is already significant higher – capped the pair during two period in late 2011 and then served as the “shoulders” to a head and shoulders pattern. 1.3860 was also a swing low in the summer of 2011. The head of the H&S is 1.4247.
Before reaching the head, we have the all important round number of 1.40, which will probably trigger angry comments from European officials.
You can see the lines in the chart below – click the image to enlarge.
For more on the euro, see the EURUSD forecast.
Dissatisfaction with the value of the euro was already heard from German Chancellor Angela Merkel, French President Françios Hollande and the former head of the Eurogroup, Jean’Claude Juncker.
The markets like the improvement in the bond markets, but this may flip once they understand that the strong value of the euro is hurting growth prospects.
Later in the day, the focus will shift to the US: the world’s largest economy releases the first estimate for Q4 GDP, and the Federal Reserve makes its rate decision.Get the 5 most predictable currency pairs