EUR/USD-Edges Closer to Breakout, But Not Yet

The following is your EUR/USD outlook for March 17.

Even on a Fed day the pair could not get above 1.3800 on Tuesday.  That said, it does appear that it will happen.  Since early march the EUR/USD has continually put in higher and higher swing lows.  1.3800 does need to be moved through, but barring a drop below 1.3640, it is highly likely to occur.  Such a move through this important resistance level indicates a move higher, with targets at  1.3840, 1.3920 and 1.3940-1.3960.

A drop below 1.3640 indicates downward pressure and a move back lower to test support at 1.3530 and if that is broken a re-test of range lows at 1.3430.

Over the past 2 years, average true range (12) has bottomed out around 100 pips average movement per day.  Currently we are close to this level and thus volatility is likely to increase.  A breakout higher is a likely catalyst for this.  No breakout, and thus continued price action within the established range, means volatility will likely remain near current levels on average.

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