EUR/USD gets ready to break its short term range!

With inflation in the Eurozone now at 3.5% and interest rates being higher in the Eurozone than that of the U.S. there's not much incentive to go into the U.S. but there's been a huge incentive to go into the euro lately.

If the pair breaks in its fundamental direction (which would be the most solid trade), then it will take out the red resistance line and head for 1.60 at least. Check out the chart below. Click on it to enlarge the image.

EUR/USD gets ready to bust out of its tame range!

If the pair breaks counter to all logic, then the dollar may get a short term break as the pair runs down to the green support level around 1.5350ish.

If it did this, it would more than likely be due to a huge correction in gold and oil.

Gold was down 15 bucks an ounce today and oil pulled back a bit as well. That's what held EUR/USD in check today.

However, we've got plenty of news announcements to "stir the pot" this week. We'll have the Institute ofr Supply Management (ISM) tell us about the manufacturing and services sector in the U.S. as well as the Non-Farm Payroll report on Friday.

So between all of these very important announcements, we'll likely see this one end the week very different (one way or the other) from where we see it sit right now.

So get ready for some support/resistance levels to get violated shortly (in the upcoming days minimally).

Sean Hyman
Currency Director
The Sovereign Society