Strengths of EUR / USD:
- EUR / USD showing little life to a major support
- Breaking of March Depression Could Lead to Big Move
EUR / USD showing little life to a major support
the EUR/USD The trend line extending higher since the mid-1980s is something that I have discussed a lot recently because of its potentially massive impact not only on the single currency, but on the entire foreign exchange market. How can I get the price of the mid-80s when the euro has only existed since the late 90s?
By restoring the currencies of the constituents that make up the euro going back to the time when the FX began to float freely. Through this reconstructed lens, we see a trend line from 1985 to the present day. The way the EUR / USD failed to generate much buying interest around such a large threshold suggests that it wants to break, and maybe soon.
The winding of price action since the March trough indicates that a breakout should take place in the coming weeks. The high level to watch is 10635, the lowest in March. A firm fall could trigger a powerful bearish move which quickly removes the January 2017 low of 10340, followed by the pair. Given the size of the trend line and the general weakness of the euro, it seems likely that there is much more to be done than just parity. We will continue to follow in the weeks / months to come…
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EUR / USD monthly chart (BIG line-in-the-sand)
Data source: Bloomberg
EUR / USD daily chart (corner break, high level is 10635)
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— Written by Paul Robinson, market analyst
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