EUR/USD - The break higher is underway
As I warned in my output of Thursday (Charts of Interest – perfect night for ‘risk on’) the EUR/USD today appears to be confirming the attempted break higher of Friday.
The ‘Inverse Head and Shoulders’ pattern documented in the chart below should now come into effect suggesting a rise as high as 1.4300 can unfold in the weeks/months ahead.
Understand this ! – that the previous Eurozone ‘Crisis Indicators’ …the outright cost of borrowing for Spain and Italy (and the cost relative to safe haven Germany) are now at their lowest levels in 7 months. The so called troika (ECB, IMF and the European Commission) has done its job and created cheap enough funding now so that Greece and other stressed countries can safely battle through for the next 2 years, time for their governments to implement the necessary fundamental reforms.
1) The 18 month trend line is now broken
2) A closer looks shows that Friday’s failed attempt has been overcome paving the way for the new move.