EUR/USD breaks major resistance at 1.39

Instead of declining from 1.39, a multi-year down-trend, the Euro notably appreciated, as was suggested by the technical indicators. Considering that the signals remain strongly positive, the rally may extend further, at least up to the rising resistance line at 1.3958, where the trend-line merges with the monthly R1 and weekly R2. Should this supply area also give in to the bulls, we will be looking at the 2011 highs at 1.42 as a potential next target.

In response to the sharp appreciation of the common currency the share of short positions increased only fractionally, from 68% to 70%. At the same time the percentage of sell orders declined from 63% to 55%.