The Dollar today pulled away from a 3 year low after investors locked in their profits following a month of short positions. The recent bounce off the 3 year low index for the Dollar may be temporary though, as the realization of the long term interest rates in the US may see the Dollar being further sold.
Thus far in the USA session, the Euro has rocketed over 100 pips, gaining as the higher than expected Producer Price Index of 6.7% for March. The Euro is currently trading around the 1.4871 level as it approaches yesterday’s 17 month high of 1.4901.
The current pattern on the hourly chart sees the Euro in a range between 1.4901 and 1.4755. Should the EURUSD pair convincingly break the recent high of 1.4901 we may expect the Euro to go on and reach the 161.8% Fibonacci extension of yesterday’s high till today’s low, which is at the 1.4990 levels. This break of yesterday’s high is currently a strong resistance level as it also denotes the 261.8% Fibonacci extension of the April 21st to April 26th movement.