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Finally some seriously  big action in markets. Four days after complaining about the lack of volatility, we have a move totally some 300 pips in EUR/USD in those four days.

The world’s most popular currency pair has confirmed the breakouts. The pair initially struggled to break out of the uptrend channel. It was later rejected at the resistance line of 1.1120. No more: euro/dollar is already at 1.1160, leaving no room for doubt.

The next level of resistance is 1.12. The round number carries its significance mostly from being round. It also capped the pair back in July 2016. The really big level is 1.13, and not because it is round. This was the high mark on the night of the US elections. The dollar initially fell on the Trump win, but things quickly reversed.

If the pair breaks above this 6-month high, we are at levels last seen in August: 1.1360 and 1.1420 are next, but they are from now.

More:  Trading a Trump impeachment with the US dollar in 3 phases

Will we see a correction before a further move? Perhaps. Support lines await at 1.1120, 1.1050 and 1.10.

Comey memo and potential Trump impeachment

The big downer of the dollar is the Comey memo. According to the account by the former FBI Director, Trump asked him to let go of the investigation of Michael Flynn, the disgraced former National Security Advisor. It seems that the President demanded to stop the investigation into his own campaign’s dealing with Russia.

This amounts to obstruction of justice and is considered an impeachable offense. While  we are in early days for Trump to step down, this cannot be ruled out and it means no imminent tax cuts nor infrastructure spending.

The greenback is not limited to falls against the euro. USD/JPY fell some 200 pips and stock markets crashed.

More:  EUR/USD: 3 Reasons To Stay Bullish For A Run To 1.12/1.13 N-Term – ING