EUR/USD Weekly Breakout

FX:EURUSD   Euro Fx/U.S. Dollar
  • EUR/USD trades in a 1000 pip range since the beginning of 2015
    Ttouched the top of the range last August and reversed to the long-term range low
    Was recovering slowly and trades now at the very important 1.1030 / 1.1095 resistance zone

If the pair closes above the August 2015 - October 2015 descending trendline and the 1030/1095 resistance zone then the space opens up towards the next resistance zone at 1.1350 - 1.1450

As the FED has just started its rate hike cycle and the ECB clearly wants to see the Euro             lower, the heavy upside movement seems to be against the fundamentals.

Contrary to the downward bias EUR/USD             trended higher as risk-aversion is increasing. Implied volatilty levels are increasing. The VIX             indicies are also on the rise. US 10Y yield drops. JNK             , HYG             , EEM             (emerging market ETFs) are heading down. Stock indicies are at least struggling. JPY gains contrary to recent BoJ measures. These all tell that the market is hesitant and till the above conditions do not easy the Euro             is going to be bid.

I believe that this Friday's NFP can be a very good catalyst to increase the risk-aversion level of the currently hesitant market and EUR/USD             targets the long-term range top.

Trade active: Long @ 1.1126
Stop @ 1.0995
Take profit @ 1.1400
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