By: Mike Kulej
This has been a very good week for the Euro. The common currency rallied first anticipating a positive austerity vote in Greece and then in response to it. All said, in last four days, the Euro advanced over 400 pips against the USD while also gaining on other currencies.
For some time the price of EUR/USD, as seen on a daily chart, has been moving in ever-smaller swings, contained between the high of 1.4939 and the low 1.3968. It is also between two trendlines, which form a symmetrical triangle.
Most recently, the price tested the supporting trendline, twice, and both times, it failed to close under it. After this week’s rally, the EUR/USD found resistance on the other side of the triangle. The price retreated from the daily high and did not close above the trendline. Now that high of 1.4537 becomes a pivotal level, which might determine the next major move.
We can see that the ADX started to move higher, in line with the rally, suggesting a possible start of a new trend. However, to confirm it the price must close above 1.4537 soon. Otherwise, the EUR/USD will remain in a sideways mode for a little longer.