October 18, 2013 – EUR/USD (daily chart) reached its upside target of 1.3700 on Friday morning, closely approaching the 1.3709 high that was established back in early February. This level is a major resistance area and was the clearest upside target for the bullish trend that has been in place since the July low at the double-bottomed 1.2750 support level. The quick ascent that occurred on Thursday after the U.S. debt ceiling resolution was reached prompted the currency pair to break out above a pennant/triangle consolidation pattern.
Now that this major 1.3700 resistance level has been reached, the pair is at a critical technical juncture. A strong breakout above 1.3700 could prompt an extension of the current uptrend to begin targeting its further upside objective around the key 1.4000 technical and psychological level. Key downside support on any pullback from resistance continues to reside around the 1.3500 area.
James Chen, CMT
Chief Technical Strategist
City Index Group
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