It isn’t often that I include a fundamental aspect to the headlines, but yesterday’s price action for the Euro was so consistent across the board that I felt compelled to highlight the technical landscape ahead of key event risk for the currency.
It goes without saying that the news surrounding Greece has been a focal point for the Euro over the past 12 months. In fact these negotiations have plagued the currency for several years now.
Those of you who have followed me for a while know that I give no weight to fundamentals when trading the Forex market, and the drama in Greece is no exception.
However it is certainly worth pointing out the correlation of multiple Euro-based currency pairs breaking out ahead of key fundamental drivers.
A glimpse into the future perhaps?
Whatever comes to be, there’s no doubting the fact that the Euro put the brakes on in a big way during yesterday’s session. And it wasn’t just isolated to the EURUSD. We saw key breaks in other pairs such as EURCAD and EURJPY as well.
Do keep in mind that volatility is likely to sore for the Euro in the coming days and there is no telling when the turbulence will end. It’s a long road ahead for the Eurozone regardless of what happens with Greece over the short-term.
As a primer to the key events on tap, here are some of the Euro pairs that are of particular interest at the moment.
I mentioned the potential for near-term gains in the EURUSD in yesterday’s commentary. The confluence of support just below the pair at yesterday’s open was more supportive for immediate gains than losses and the pair certainly didn’t disappoint.
From here buyers can watch for an entry on a rotation back to new support at 1.1050. Key resistance comes in at 1.1260, 1.1452 and of course channel resistance.
The pair I’m most interested in and also have a stake in at the moment (long from 1.3670) is EURCAD. I mentioned this inverse head and shoulders pattern several weeks ago noting that a daily close above 1.3765 was enough to confirm the reversal.
Yesterday’s close above the neckline should bring more buyers to table as the pair eyes key resistance at 1.3915 (yesterday’s high). A break there would open up the door for a retest of trend line resistance from March of 2014. Break that and the measured objective at 1.4480 is a likely target in the weeks ahead.
A little less organized than the inverse head and shoulders on EURCAD, but a reversal pattern nonetheless for EURJPY. Buyers can look for immediate support at 137.90. A break lower from there would see the neckline come in as key support for the pair.
Key resistance comes in at 140.54 and 143.40 with a measured objective of 147.20.