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By HaleStewart March 5, 2014 9:56 am
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Euro, Yen and Pound Technical Update

Several weeks ago, I noted the 1.38 level had provided strong resistance for the euro/dollar pair on three different occasions over the last 6 months.  The above chart shows this level is again (for the 4th time) providing very strong resistance for the pair.  Remember that at the macro level, the ECB is still closer to engaging in more easing because of potential deflation while we know the Fed is already tightening.  Until we get a clear signal from the Fed that they are going to stop tapering, there is little reason to think that even a breach of the 1.38 level will be technically meaningful. 

While the pound has broken through resistance, it has done so due to weaker US data that is at least partially caused by severe weather.  Since moving through resistance, the pound has consolidated gains in a triangle pattern, using the 10 day EMA as technical support.

    

The yen broke through the support of the consolidating triangle pattern.  However, prices have now rebounded and are approaching resistance. 

Hale Stewart is a former bond broker who has been writing about economics and financial markets since 2006 on the Bonddad Blog.  He is also a tax attorney with a domestic and international practice while also forming and managing captive insurance companies for US companies.   You can follow him on twitter at:@captivelawyer

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