October 2, 2013 – EUR/USD (daily chart) has advanced to establish close to an 8-month high after having just broken out above a bullish pennant consolidation pattern that had been in place for the past two weeks. This breakout tentatively confirms a continuation of the short-term bullish trend that began from the July low around 1.2750 and then pulled back to the 50% Fibonacci level in early September before advancing to continue the uptrend. Currently, the new high brings the pair close to approaching its major resistance target to the upside at 1.3700, which was last hit back in early February. Any further breakout above 1.3700 should put the pair on track to reaching towards the key 1.4000 psychological level. Major downside support on any pullback within the prevailing uptrend currently resides around the 1.3450 price region.
James Chen, CMT
Chief Technical Strategist
City Index Group
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