
In mid 2008 the Euro hit its highest point
against the US dollar since the birth of the Euro, and in modern times if the
German D-mark is taken as a proxy for the Euro prior to its inception.
The high in 2008 was in response to the Great Financial Crisis and the steps being taken by the Federal Reserve and others to contain it, with fluctuations after that which happened as a result of the sovereign crises in certain countries in the Euro zone, most notably
Since the high of mid-2008 the EURUSD pair has respected a declining triangular pattern, or in technical terms a pennant, between a well defined upper trend line and its 200 monthly period Simple Moving Average (SMA) (see chart above).
There are indications now that the pair will fall from here, which are both technical and fundamental. Technically, this pennant is signaling a short trade, as its upper trend line is falling in a significant manner. Fundamentally, two notable things have happened: The USA is about to become, once again, self-sufficient in oil, due to developments in shale oil extraction and “fracking” technology, and the Federal Reserve is giving strong indications that Quantitative Easing (QE) will be a thing of the past in the not-too-distant future. In
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