EUR/USD Sep. 13- Breaking Out Higher

EUR/USD began the week with a break out of the downtrend channel and towards a higher resistance line. Will this optimism over the Basel III continue pushing the Euro higher on a light day? Here is a quick update on fundamentals, technicals and community trends.

EUR/USD broker above temporary downtrend channel. Click to enlarge.

EUR/USD Technicals

• Asian session:  Active session seeing EUR/USD break out above 1.2770, and bouncing off 1.2840.
• Current Range is between 1.2770 and 1.2840.
• Further levels: Below,  1.2770, 1.2610, 1.2460, 1.2330 and 1.2150.  Above   1.2840, 1.2930, 1.30, 1.3110 and 1.3267.
• Downtrend channel broken and left behind: EUR/USD traded towards the end of last week in a temporary downtrend channel. This was broken and left behind.

EUR/USD Fundamentals

All times are GMT. Most important events emphasized.

• Jean-Claude Trichet, president of the ECB, talks at Basel. He might comment on the Basel II accord that is pushing the Euro higher.

EUR/USD Sentiment

• After lengthy talks, an agreement was reached in Basel regarding the banking system – this international agreement is expected to make banks more stable. The implementation will be very gradual.
• The reason for the big collapse last week – European debt issues, with a strong focus on Irish banks, made a “comeback”. These issues might return this week as well.
• Market is drifting between “risk on” and “risk off” with a tendency to “risk on”. With “risk off”, good US figures boost the dollar and bad ones hurt it. When risk is on, bad US figures boost the dollar. In recent days, we’ve seen more normal behavior.
• 1.2660 is a stronghold on the downside, 1.2930 on the upside.
• Currensee Community: 55% are Short, 45% are long, up from 57:43 yesterday. These are 958 open positions in real accounts trading this pair at the moment.

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