After more than a week of going almost nowhere, finally some signs of life. Fundamental drives have impacted where Fed chair Powell’s supportive comments spurred USD weakness, and Eurozone Recovery Fund traction have supported the euro. Will the dollar weakness and euro strength that emerged yesterday be enough for EUR/USD to now go on a bull run? For almost two weeks the market has been stuck in a mini range 1.0765/1.0890 but the bulls have stirred from their slumber to break above the $1.0890 pivot. This move needs to now hold today. It has been an important pivot throughout the past six weeks and is a key gauge for sentiment of the market. Holding above will leave EUR/USD in the upper half of the $1.0725/$1.1015 trading range and suggest pressure growing on $1.1000/$1.1015. Momentum indicators are now ticking higher, but are still within the confines of ranging outlooks. The RSI will be the one to watch, moving to a two week high, the bulls are building a position. If it moves into the high 50s it would be a signal of real strength building in a move higher (confirms above 60). A failure back under $1.0890 would be disappointing today and simply reinstate the previously sticky outlook around $1.0800.
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