Euro vs dollar daily chart

EUR/USD – daily chart

The EUR/USD continues to defy all the market analysts who had consigned the euro to the history books as it plumbed the lows of 1.2000, back in late July, and since then the euro shorts have been covering their longer term positions, as the currency continues to recover strongly, helped of course by it’s political lords and masters.

In the last few days, the euro dollar has found some resistance in the 1.2600 price area, and indeed this was once again a feature of yesterday’s trading session with the currency pair closing higher on the day at 1.2598, having touched an intra day high of 1.2623. The key over the next few days will be whether we see a break and hold above this level, and if so, then we can expect to see the pair push higher in over the next few days, and push towards the next level of resistance in the 1.2800 price area. Whilst this may be extremely uncomfortable for the EUR/USD shorts, Hawkeye is giving clear signals of a continuation of the recent bullish trend, with solid buying volume over the last few days on both the daily and the three day chart. In addition, the Hawkeye Heatmap remains firmly bullish, and with the Roadkill signals having delivered two entry set up’s towards the end of August.

The fundamental picture for the euro remains complex, and mired in the politics of those countries struggling to survive, and whilst Greece was the initial focus of attention, it is Spain which is likely to cause any longer term structural failure in Europe. Plans of course, come and go, and ultimately it will be the ECB which stands behind the currency in the longer term. Failure is not an option which is why ultimately the currency will survive, although we are far from the end, despite whatever euro bond buying debt plan Mario Draghi may propose. Like all the other plans, this is likely to lead to some short term euphoria in the market, with further bullish sentiment for the euro, but in the longer term, just like every other plan, this euphoria will die away to be replaced with the cold harsh reality of the true state of the Eurozone economies.

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