EUR/USD: Euro breaks downward trendline

In the last analysis I said the Euro was heading for a test of the dominant trendline at 1.2800.  That target has been met and exceeded as the pair closed out the week at 1.2928.  This means the downward trendline has been broken.

There is a band of resistance between 1.3100-1.3300 making this an interesting area.  A rise to the lower part of this region is likely, but how it reacts in this area will provide signals as to the longer term direction.  A rally through 1.3300 indicates continued buying into the 1.3700-1.3800 region.

At this time, the pair remains in correction higher.  A move back below 1.2475 indicate that the move higher has ended and a move back lower is likely.  The upward trendline currently crosses just below 1.2400.  A drop below that trendline is needed to confirm a reversal back lower.

Cory Mitchell, CMT

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