EUR poised for higher

Posted by Graham Parlane on 27 September 2012

All

Base case is that the (almost co-ordinated) central bank actions of the last few weeks support the market like the previous QE programs have.

Under that scenario we would then expect to see ‘risk’ higher.

EUR/USD moved strongly higher in anticipation of the FED and ECB programs so I view this 8 day pull back since the announcement as nothing more than a profit taking correction (buy the rumour, sell the fact).

Yesterday the EUR/USD appears to have reversed (key day reversal – lower low, higher high and close) and the 8 day gentle downtrend appears to have been broken to the top side.

This should be an important indicator for all pairs against USD suggestive that we will see NZD, AUD, GBP, Gold and Silver all (significantly?) higher in coming weeks.

Fig 1 – Daily EUR/USD chart

Daily EURUSD chart – click here to view

Fig 2 – A closer look at the downtrend line via the hourly chart

Hourly EURUSD Chart – click here to view

The last confirming level to cement my view will be if/when the EUR/USD lifts above my model level which is currently falling mildly at 1.2965.

Cheers G.

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