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EUR/USD made a break above the critical 1.3415 resistance line and is now trading at the highest levels since February. 1.3415 was the June high.

The high so far is 1.3437 and the pair holds its ground above 1.3415 so far. The pair extended a move seen earlier that saw a peek above 1.34, the previous high.

The euro enjoys a relatively quiet summer in the debt crisis front and uncertainty about Fed tapering in September.

While Greece might indeed need a third bailout that might include a loss for European governments that lent it money, there are bigger troubles in the world at the moment: money is flowing out of emerging markets. Some of it is heading to the safety of the US or Japan, but also to the euro-zone.

Yields of Spain and Italy are now considered much safer, with the ongoing OMT backstop. In addition, the euro is the second most liquid currency after the US dollar.

What’s next? 1.3415 now turns into support. Resistance appears at 1.3520, followed by 1.3580. Higher above, the early 2013 peak of 1.3710 looms. For more levels, events and analysis, see the EUR/USD forecast.

Is it really so good in the euro-zone? Not really. The troubles aren’t over but Germany would prefer a quiet period before the elections on September 22nd. Things could change afterwards.

It’s important to remember that while the euro-zone returned to growth in Q2 2013, this growth was mostly built on Germany and France, and is not necessarily sustainable.

Further reading:  Euro strength – how long will it last?