Forex Analysis: EUR/USD Advances Sharply to Six-Month High

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2013-08-20-EURUSD

August 20, 2013 – EUR/USD (daily chart) has made a tentative breakout above a major resistance level around the 1.3400 price region, exceeding June’s high and establishing a six-month high in the process. This sharp advance is the latest bullish development within a substantial bullish trend that has been in place since early July, when price formed a double-bottom bounce from the 1.2750 level. The bullish trend has since broken out above successively higher resistance levels, including 1.3000, 1.3150, 1.3300, and now the key 1.3400 level. This latter breakout especially highlights the overall euro strength and dollar weakness that has characterized the currency markets for more than a month. If the currency pair is able to sustain the bullish momentum, strong immediate resistance resides around the 1.3500 area, with any further breakout above that targeting 1.3700 resistance to the upside, around the February high.

James Chen, CMT
Chief Technical Strategist
City Index Group

Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.

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About Author

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.

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