Breakout from a bull flag (EUR/USD)

The EUR/USD is showing a breakout from a bull flag that is classic enough to be included in an technical analysis manual. The trend is in favor of a breakout and I think, fundamentally, the USD is weak enough to drive this pair above its previous highs. That makes for a target of at least 1.4300 if the market continues to rise. I feel like the fact that the EUR/USD just bounced off the 23.6% fib level adds a little more weight to this analysis.

I was already long this position but had covered it towards the end of last month with a put. I think at this point the breakout is clear enough to remove the cover before that put becomes worthless in a couple of weeks. Alternatively, I think this breakout on the USD could be traded very effectively against an even more fundamentally sound currency like the AUD. 

This is a breakout we have been tracking in the video pairs analysis. For more detail - click here: http://www.pfxglobal.com/index.php?option=com_content&task=blogcategory&id=57&Itemid=189

EUR/USD           Source: MetaStock Pro FX      For a free 30-day trial click here

Author

John Jagerson

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