- Continuation of weak USD theme here.
- On EUR/USD monthly chart, overhead resistance formed by the downtrend line through the Jul08 and Dec09 highs was at 1.4350 last week. Slope of line is appx 50 pips per week, so this week the said resistance level drops to 1.4297. There is also the previous high at 1.4281 nearby.
- Break points to above 1.50 (1.5144 to be precise).
- Market is clearly already long EUR so I am awaiting to see reaction after widely expected ECB hike on Thurs for clues as to whether we can push through above 1.43 easily or if it's going to be an agony trade (like the USD/CAD). Might not be a bad idea to take some profits near to 1.4281 if we see it before ECB meets. If break after, would be a different story.
- USDX has already broken below its equivalent EUR counterpart. All the more remarkable when you consider that USDX is 57.6% vs EUR (not yet broken) and 13.6% vs JPY (going down ie wrong direction). This makes the USDX (on NYBOT) short a better trade than EUR (CME).
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