EUR/USD Breaks Major Resistance at 1.10

EUR/USD Breaks Major Resistance at 1.10 Over the last year, the Euro has been one of the bigger disappointments in the forex markets with the currency falling to …

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EUR/USD Breaks Major Resistance at 1.10

Over the last year, the Euro has been one of the bigger disappointments in the forex markets with the currency falling to unprecedented levels against many of its most commonly traded counterparts.  This has prompted many traders to start selling the currency on a negative momentum basis but we are now seeing moves in the market that might be contradicting some of these initial tendencies.

Specifically, this means that the EUR/USD has now broken major resistance in the 1.10 area.  Of course, this marks an important psychological region that will likely influence sentiment for at least the first half of this year, and so this is a new development that deserves more attention in the financial media.  

Price Outlook:  EUR/USD

Chart Source:  FiboGroup

Here, we can see that the latest moves in the Euro have been relatively forceful as we are now crossing into price regions that have not been seen since last November.  This is leaving many forex traders wondering whether or not these moves are sustainable.  But when we look at some of the underlying fundamentals, it is starting to look more and more like this is actually the case.

The best example here can be seen in the fact that the European Central Bank (ECB) continues to implement its QE programs without much of a material decline in the value of the Euro.  These trends are even more apparent in peripheral currencies, as pairs like the EUR/GBP have fared much better over the last few months.  When the market as a whole chooses not to act on bearish influences like this, it is a strong indicator that the previously negative trend has run its course and that we are now in store for higher prices.

 

Taking Active Positions

So if you are currently looking to take an active position in the Euro, there is less and less of a reason to be bearish.  This bias remains largely intact as long as prices stay above the psychological level at 1.10 but if we were to fall below this area there should be stop losses below that will probably accelerate prices much lower.  These are the key factors to watch for those that are looking to trade in the Euro over the next few weeks.  


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