Is the Euro About to Climb Another Stair-Step to A New Record High?

Good day Currency Traders!

Pinpointing support and resistance levels on price charts isn't usually that hard.

You just have to find previous points where prices bottomed out or topped out on the chart. But that task becomes a bit more difficult when there are no historical prices to target.

Take the current skyrocketing price of crude oil. Almost anyone who follows the markets or drives to work knows crude oil prices (and all energy prices for that matter) are at the highest levels in history. So you can't use price data alone to find where crude might top out, because it's impossible to find a previous high mark to use as a target.

Focusing on the currency markets, as I do, there have been many instances over the last year where currencies paired against the buck have soared to record levels. The euro, having become a virtual dollar alternative, is the obvious example.


The Exact Opposite of a Sinking Dollar

The euro has easily surpassed its all-time highs against the greenback since the multi-nation currency's inception. While the euro has only been around since the 1990s, many analysts turned to the historical prices of the German Deutschemark as a euro proxy. But even still, the dollar has sunk to a level against the premier European currency that has never been seen before.

Throughout the euro's climb, as it navigates through uncharted territory, key psychological levels have become points of resistance. Only these points haven't slowed the euro all that much. A chart shows a clearer picture:

We could go back through pages and pages of articles to read about expectations for the euro in each step of its bull market. But it's a lot easier to just look at this chart.

Considering the euro's unprecedented climb, analysts highlighted critical barriers at US$1.30, US$1.40 and US$1.50. And now US$1.60 is the mark to beat.


About to Soar Up, Up, and Away...Again

You can see how each psychological barrier created some uncertainty. At those points the euro merely tracked sideways - a clear departure from its "up, up and away" price trend. But now, having faded after briefly touching the psychological US$1.60 mark, it looks as though the euro is building back up some steam.

Should we get a decisive break of this level in the next few weeks, we could be hearing US$1.70 a euro in no time...And a lot sooner than many thought possible.