The EUR/USD has finally taken out 1.2100 and we are moving our target to a more ambitious level of 1.2500. The Euro is now fully in bull market territory.
I’m looking to enter on a pullback at 1.2125 with a stop loss at 1.9250, just below support. Our upside target is 1.2500. This is more of a longer-term trade.
EUR/USD 240 min Chart - EUR/USD is Bullish
Can the EUR/USD Takeout 1.25?
Last week we finally saw a bit of a change in the way the Euro was trading. We’ve been flirting with the 1.2100 level for a little while now but we hadn’t been able to crack the highs. That all changed with the ECB minutes.
Reading between the lines it looks like QE has really just been a failure in Europe. The ECB is getting ready to taper and traders are going to start seeing money flow back into the Eurozone. That lead price to really start breaking higher.
The decline in the USD also started to accelerate. Despite a stronger than anticipated CPI print, the US Dollar fell. The US Dollar Index took out a key support level in the process and is now targeting 90.00.
That means we are looking at much more upside to come in the EUR/USD. 1.25 is now the next major upside level. It might not be smooth sailing and there will likely be some back and forth, but I suspect we are getting ready for more upside in the coming months.
Key for the Week - Eurozone CPI
The US managed to produce a strong CPI figure and now it’s over to the Eurozone to see what they can do. As QE ends we are going to start the talk around rate rises and the obvious issue will be inflation. Or more correctly a lack of inflation. A strong print here might see the EUR/USD skyrocket.
Technical Analysis - The Key Levels
The EUR/USD has finally broken above the all important 1.2100 level. That now turns into a major support level for us. If we fall below support we will have to reevaluate our thinking. To the upside 1.2500 is our new target. We might not get there this week but over the coming weeks and months there is a strong chance of a test of that level.
EUR/USD - Key Levels
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