EUR/USD: Break Over 83.542 Signals Stronger Long-term Rise for USD
EUR/USD has broken under the range of yesterday towards the short-term target at 1.2150. Should this level be met, a degree of support would be anticipated. However, this would be expected to be short-term in nature, with scope then for a substantial extension lower, provided a material break over 1.2400 cannot be achieved.
Trade in the US Dollar Index has also broken over the key high at 83.542. In a similar manner to EUR/USD, we see scope for a minor pullback from close to the current region. However, we note that yesterday's breach of the key level at 83.542 now warns of a much stronger long-term rise.
Longer-term charts in EUR/USD exhibit a mutli-month falling channel. Combined with negative daily structure, scope is seen for an eventual fall to the 1.0800 region.