Euro to a 6-week high against dollar

The EURUSD is back to trade above the important psychological level 1.3.
This is a clear breach of its long range trading since October 21.

The pair is now on its way to test the resistance at 1.3290. This level is the final boundary of the current trading rage.

Two main reasons for the Euro’s strength against the dollar.

First, European Central Bank Executive Board member Juergen Stark said late on Wednesday the bank did not have a lot of room for maneuver on rates after its cut last week. This came as a sign the ECB might restrict its cutting rate policy in the future - creating some demand for the European currency.

The second reason is technical, since the pair has reached a bottom on October 27 (1.2301) after a very sharp drop, the market is still lacking an appropriate correction for this move.

An appropriate correction at this stage (if indeed will take place) should be at least 1.3500.

As a note to my past post named EURUSD long term technical overview - this pair needs to confirm its strength by first closing the week above 1.3, only then a long could be considered, since there is still a high risk the pair will be soon back inside its recent range.