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EUR/USD breaks out, next stop 1.44? |
by Ryan Teeples
The correlation between US stocks and the rise and fall of the USD against the EUR has been stronger than ever the last 3-4 months. The stocks rally of last week, however, didn't give us major moves on the EUR/USD. Instead we've watched the pair bounce within a predictable consolidation zone.
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Today, however, investors reacted to the rally in US Stocks and has sent the EUR sailing against the dollar (chart below), breaking easily out of the wedge it had been trading in. When the US markets are strong investors take their money out of very conservative USD-backed investments and put it in the stock markets. This causes the EUR to gain ground against the USD.
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Essential Reading for Traders
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| | | | | Learn to use support and resistance to identify buy and sell points.
Now, it looks to me like the next stop is resistance at the top of our fibonacci retracement at 1.44. Let's watch US stocks closely.
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