[cppene]

• Trading significantly below the 55 day moving average following Friday’s developments.
• A close below there would be a bearish development that would open the way for a test of the 200 day moving average which currently comes in at 1.4097
• Near term support levels are at 1.4720 (Dec 2008 high) and 1.4626.
• Note that it was this time last year that EURUSD closed the large 55-200 day moving average gap.

We are concerned that the weeks ahead will likely see a serious USD rally of approximately 5%. It appears as though Friday’s improved labour market data has turned out to be a significant development that has led to a strong rise in U.S. 2 year yields and a USD rally. This dynamic looks set to continue for now.



• Closed above the 55 day moving average on Friday and has breached important resistance levels that all converge just below 76 (55 day moving average, trend resistance, horizontal resistance level).
• This strongly suggests a rally up to the 200 day moving average over the coming days / weeks. It is currently at 79.86 which is 5% above current levels.