EUR/USD Jan. 19 – Cautiously Testing High Ground

EUR/USD is now above the strong resistance line, but is very hesitant. Will the breakout be confirmed, or is it again, a false break?   Here’s a quick update on technicals, fundamentals and community trends.

EUR/USD Technicals

• Asian session:  Slowly moved up and passed resistance.
• Current range – 1.3440 to 1.3576.



• Further levels in both directions: Below   1.3440, 1.3334, 1.3267, 1.3180, 1.3080, 1.2970, 1.2920,  1.28, 1.2722, 1.2587.
• Above   1.3576,  1.37, 1.3786,  1.3950, 1.4030 and 1.4220.
• 1.3440 is the key level – it has stopped the Euro so many times in the past – a confirmation is necessary for the breakout, as the move isn’t sharp, and we’ve seen false breakouts around this line more than once.
• Important support is only at 1.3080, with 1.2970 being the second important line.

Euro/Dollar moving on up – click on the graph to enlarge.

EUR/USD Fundamentals –

• 9:00 European Current Account. Exp. -10.2 billion.
• 13:30 US Building Permits. Exp. 560K
• 13:30 US Housing Starts. Exp. 550K.

* All times are GMT. For more events later in the week, see the EUR/USD forecast.

EUR/USD Sentiment

• Less fear from a rate hike helps the Euro.
• The Irish banks find new money at their own central bank. Some say that the Irish central bank is printing Euros. Trichet ignores this.
• Spanish bond yields remain high, 5.48%. When the focus will return to the debt issues, the high yields will weigh on the currency.
• The market was very optimistic last week, but here are 5 doubts about the Euro rally.
• A bailout for Portugal is fading away, as bond auctions were quite successful – this includes also Spain and Italy’s auctions.
• Inflation is becoming problematic for Europe. This comes as employment is still high. Double trouble for Europe. Trichet showed concerns about inflation and boosted the Euro.

Currensee Community: 62% are long , 38% are short. These are 1348 open positions in real accounts trading this pair at the moment.