EURUSD broke higher through key resistance yesterday in the 1.4250 area. Overnight we saw a bit of consolidation and the European Central Bank rate announcement and subsequent ECB press conference saw an attack of the previous resistance/now support in that same 1.4250 area. The pair has survived the attempt quite well and may be set for a move to as high as 1.4500 in the coming days. An hourly close or move below perhaps 1.4240 could be considered a rejection of the prospects for a further extension of the EURUSD rally, however.
At the moment, the USD seems unable to mount any kind of rally as the Federal Reserve is seen hopelessly behind the curve on monetary policy tightening and the U.S. government even risks a shutdown this weekend on budget fights. Further out, we should note, there is a risk that we are in an ascending wedge kind of scenario (classically resolving into a sharp sell-off from its upper bound), so we limit the potential upside expectations to perhaps 1.4465 at the moment.
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