December 9, 2013 – EUR/USD (daily chart) has just reached and tentatively surpassed its previous resistance target at 1.3700, establishing a new 5-week high. This substantial advance comes after an entire month of consistently bullish price action as the pair rose steadily from its 1.3300 support level in early November, which was the low of the last major downside correction.
Having reached and exceeded the pivotal 1.3700 prior resistance level, EUR/USD now has a clear upside resistance objective at the 1.3830-area multi-year high, which was last reached in late October. Any further breakout above that level would confirm a bullish trend continuation, with a further upside objective at the 1.4000 level. As the pair is currently showing substantially overbought indications, however, another pullback is potentially due. Key downside support on this potential pullback within the current bullish trend tentatively resides around the 1.3600 level.
James Chen, CMT
Chief Technical Strategist
City Index Group
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