Playing the Upside on the EUR/USD

The Euro continues to surge against the U.S. Dollar, recently breaking through the previous ceiling at 1.3334 which was the August 6 high. This move has now solidified the bullishness that was confirmed when the EUR/USD was able to trade through the 200 period simple moving average at 1.3198.

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The EUR/USD easily broke through the area of resistance between 1.3097 and 1.3426. This area should now be considered potential support on a pullback. As prices continue to rally, testing the resistance at 1.3500, many traders are looking ahead to what could be a more significant ceiling for the pair if the U.S. Dollar continues to sink.

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The Triangle breakout through downtrend line resistance at 1.3145 has triggered a momentum entry long with creates anticipation for higher highs but the selling pressure at 1.3500 is likely to smother buying momentum before prices can reach the April highs between 1.3680 and 1.3692. The key to more upside will be where intraday support is waiting to help the bulls keep their footing. Near-term support levels appear to be at 1.3431 and 1.3413. If there is a more significant retracement lower, look for buying support at 1.3385 which is currently the uptrend line support of a Rising Wedge on the 240-minute time frame.

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Chartology is written by Raghee Horner, trader/author
at RagheeHorner.com, Chief Currency Analyst at InterbankFX, and
Autochartist Chief Market Analyst.

*Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.