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Initial Resistance Held - Brief Update on the Euro Short

Thus far, the initial level of resistance that I thought might constrain the Euro's upward march has held. The initial bounce from these levels was a high probability event. The real key will be whether or not this line in the sand remains uncrossed if there are additional tests of the trend line (B) to come (which I would expect).

If the Euro is going to go much higher against the US Dollar in the near term, it will need to break through the $1.346-1.3475 range (above trend line B). If it is bound to break to much lower levels, it will need to break out of and remain below the lower end of the channel (trend line C) which is currently at the $1.336 level.

I have a position for either direction and am content to wait for the larger move before adding or subtracting exposure at this time. 

Disclosure: Currency trading involves a high degree of leverage and risk. Please do not participate in currency trades unless you employ strict control of risk and can afford to lose your entire investment.

Positions: Short the Euro, Short the Yen.

Written By: Joshua Ungerecht

Currencies, Currency Trading, EUR/USD, Euro, resistance, trend lines, US Dollar