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Forex pairs in this Article » EUR/USD (Barcelona) - The chain reaction of DC (continued) uncertainty, Fed tapering likely being delayed and falling US rates combined with relative confidence in Europe shot the EUR/USD out of a cannon Thursday.

Lack of data Friday to keep traders’ focus on technicals and Fed Head speeches

Once the US Congress passed the resolution last night that basically guaranteed a whole new round of partisan bickering in a couple of months, global traders deduced that any Fed tapering would have to be postponed until later in 2014. The result of this thought process was for Treasury yields to fall (nearly breaking to new short-term lows) and the DXY to be hammered (closing right at horizontal line support).

Friday will bring EUR/USD traders only four Fed Head speeches off of which to react – so focus will be on technicals when the speeches are not going on.

Technical outlook for EUR/USD

Technicians say the EURUSD rallied visciously off of correction support at 1.3488 Thursday. The cross blew right through two potential resistance levels of 1.3597 and 1.3606 and is currently trading at 1.3671. The two broken resistance levels now represent support for EUR/USD. Resistance now comes in at Thursday’s session high of 1.3691 and is backed up by the October 2011 close of 1.3857.
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