Euro Pushes Higher; Could It Break 1.3400?

Includes: FXE
by: FXstreet

After days of consolidation, the shared currency finally picked up momentum and made a strong move to the upside versus the dollar, breaking above previous weekly highs and nearing the 1.3400 resistance level.

The move higher in EUR/USD was supported by strong PMI data from the eurozone and U.S. as well as a much better-than-expected jobless claims reading. Despite the sharp rise in stocks, with the S&P piercing 1500 for first time since December 2007, the dollar trades firm versus most competitors, with the main exception of the euro.

The Cable fell to a fresh 5-month low in the 1.5750 region, while the yen reversed previous weekly gains versus the greenback after renewed comments for a weaker currency by government officials.

Euro threatens 1.3400

Even though the euro managed to move higher on Thursday, printing a high of 1.3392, the EUR/USD remains firmly in range with 1.3400 on the upside and 1.3250/60 on the downside as major lines to cross.

At this point, short-term charts show a positive bias, although the cross would need a clear break above 1.3400 for confirmation. The 1.3320/30 zone appears as the immediate support, where several MA's converge.

Of note, this Friday, the ECB is set to announce the amount that European banks will repay in LTRO loans which continue to be a strong driver for euro crosses.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.