After making little net progress last week, the EUR/USD (euro-dollar exchange rate and the most actively traded forex pair) broke just above $1.30 level (July 26).
In technical analysis, a "round number" like $1.30 often marks a point of strong support or resistance (the latter, in this case). Prices can bounce around for a while, making several attempts to break it. And sometimes, when the level finally gives, prices rush past it with vigor.
The last time the EUR/USD rallied above $1.30 was on July 20 -- only to promptly reverse and fall as low as $1.2745 the very next day. Now EWI's forex trader-oriented
Currency Specialty Service assessed whether the EUR/USD is in a better position to move higher this time around. In a July 26 intraday update, the editor Jim Martens writes:
EURUSD (Intraday)
Posted On: Jul 26 2010 1:51PM ET / Jul 26 2010 5:51PM GMT
Last Price: 1.2992
IF the rally from 1.2795 is going to extend to five waves, the euro could push to 1.3060, or even [higher].
Five-wave patterns (called "impulses") are the definition of a trending market, in Elliott wave analysis.