EUR/USD continues the upwards move and has returned to the narrowing channel that has characterized its trading during September and October – food for the Euro bulls.
By breaking above 1.2930, the pair is back above uptrend support in the narrowing channel. It left the channel with a downfall in early November. The pair later broke below the 1.28, and managed to recover and rise above this line during the past week.
EUR USD Back to Narrowing Channel – Click image to enlarge
The next resistance line is 1.2960, which served as both support and resistance during the autumn. Update: this line has been broken, with the pair trading at 1.2968 at the time of writing. The more serious challenge is the round number of 1.30.
The other part of the channel is downtrend resistance, which is at around 1.31. High resistance is at 1.3170.
For more lines, see the euro to dollar forecast.
The upwards move is mainly due to optimism about Greece: the EU is making an effort to make a deal to lower Greece’s debt and make it sustainable in the eyes of the IMF.
Quite a few ingredients are in this salad, and the goal is to prevent losses for the euro-zone governments – something that the IMF is suggesting for quite some time.
A critical Eurogroup / IMF meeting is scheduled for Monday, November 26th. Will there be a deal? This is already priced into the price of EUR/USD.
So, any disappointment on Monday could result in a big downfall, while a deal on Monday would result in a limited move upwards.
