Axel Rudolph, analyst at Commerzbank, points out that EUR/USD has broken through the five month downtrend line at 1.1105 and thus targets the 200 day moving average at 1.1154 and also the October high at 1.1180.

Key Quotes

“Further up meanders the 200 week moving average at 1.1358 which is also being eyed. It represents a critical break point on the topside from a medium term perspective. Key nearby support is the December 6 low at 1.1040. Further down lies more significant support at the 1.0989/81 November troughs.”

“Failure at 1.0981 would target the 78.6% Fibonacci retracement at 1.0943. This is seen as the last defence for the 1.0879 October low. If revisited, we would look for signs of reversal from there.”

“Short term trend (1-3 weeks): Is attempting to clear the October high at 1.1180, a rise above which would target the 200 week moving average at 1.1358.”

“Long term trend (1-3 months): The reversal from the base of a one year channel implies that the currency pair has based.”

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