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Forex pairs in this Article » EUR/USD (Barcelona) - With a light economic calendar, traders’ actions are keying off of Portuguese government news, possible trouble for top US-based investment banks and technical trading set-ups.

EUR/USD may be ready for a breakout attempt at 1.3205 resistance

EUR/USD bulls are taking a breath of relief Monday on news that Portugal’s president, Anibal Cavaco Silva, supported keeping the country’s current coalition government in place until the end of the term. Concerns were heightened recently that the country’s bailout program might be in jeopardy if unruly changes were made in Portugal. The news, along with rumors that major US based financial institutions could be facing a major investigation into their practices in the commodities arena, has the EUR/USD in rally mode once again. Recent weeks’ trading has brought the cross from the 7/9 low of 1.2755 to its current level just above 1.316.

EUR/USD causing major pain for the bears

Monday’s rally has the EUR/USD coming closer to testing the 7/11 intraday high of 1.3205. Technicians say a break of 1.3205 on a closing basis could lead to a test of key “correction resistance” of 1.3417. Short-term support for EUR/USD is the 7/18 low of 1.3065 followed by the 7/15 closing low of 1.2992. First resistance for EUR/USD comes in at the afore-mentioned 1.3205 followed by the Fibonacci-based correction resistance at 1.3417 above that.
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