August 20, 2013 – EUR/USD (daily chart) has made a tentative breakout above a major resistance level around the 1.3400 price region, exceeding June’s high and establishing a six-month high in the process. This sharp advance is the latest bullish development within a substantial bullish trend that has been in place since early July, when price formed a double-bottom bounce from the 1.2750 level. The bullish trend has since broken out above successively higher resistance levels, including 1.3000, 1.3150, 1.3300, and now the key 1.3400 level. This latter breakout especially highlights the overall euro strength and dollar weakness that has characterized the currency markets for more than a month. If the currency pair is able to sustain the bullish momentum, strong immediate resistance resides around the 1.3500 area, with any further breakout above that targeting 1.3700 resistance to the upside, around the February high.
James Chen, CMT
Chief Technical Strategist
City Index Group
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