NEW YORK (Forex News Now) – While it cannot be considered a breakout quite yet, the EUR/USD pair is showing signs of where FX traders want to send it today.
With various news-related events over the next three days, the pair has shown that the latest rise above 1.40 is trying to hold, as the displayed hammer on the 4 hour chart indicates. Again, one cannot take this as a signal yet, not with the Federal Reserve’s “Quantitative Easing 2” statement coming out later today, the ECB’s rate announcement and statement tomorrow, and the Non-Farm Payroll on Friday. However, the hammer at 1.40 and the recent low being a higher low than before, certainly shows the direction that the market is “leaning.”
Also of note, is the triangle that we were forming in this pair recently. The upper line has been broken and retested already. This could also signal where the market wants to go, and that FX traders have already started to position themselves for it. However, it is a dangerous game to anticipate the direction, and with the above mentioned announcements, as there is always the possibility of a shock announcement.
The psychological resistance level of 1.40 is becoming less and less important as we hang around the area for this lengthy amount of time, and in doing so, we make it more and more likely that the level will give way over the long run.
FX traders would be wise to be patient, let the news get released and reacted to, and then make their move. It is likely to be a volatile day or two, or even three for FX traders, and as such, the prudent should be waiting for the others to make their move.
If the 1.40 level gives way for good, a trader will be able to aim for at least 1.43 in the EUR/USD.