Hey Traders,

Collapse of the dollar index below recent uptrend line, maknig a lower low and break below 200dma has set up for some interesting developments in the euro curency.

On friday after being rejected by 200dma on first two approached, euro broke above and didnt look back for almost unasnwered 130 pips, closing way above 200dma:

Taking a look at the daily euro chart:

Heikin Ashi trend is clearly still green and has been for past two weeks , suggesting further strength, momentum indicators are also not yet in extreme overbought area suggesting possible move into resistance zone of previous multimonth high and 61% resistane zone.

When taking a look at the weekly charts, it seems that it could be a big bullish flag setting up with a lofty target of 1.5 on the euro, which is alos the area of two highs on the weekly chart. Break above 1.3736 would make that scenario more likely

Regardless of recent bullish developments in the euro, a pullback to backtest 200dma break out and the resistance line of previous channel is also expected, so will be watching smaller time frame technical breakdowns for further clues as to where Euro is likey to be heading

Check back later for intraday and daily updates where I will be watching smaller time frame technical developments as futures open in about an hour

Cheers

Vlad