EUR/USD Surges Higher On BRIC Diversification Talk And Technical break

The EUR/USD surged higher through the 100 week moving average at 1.4242 level.  The Russian President Medvedev said on CNBC that he would look to resurrect the idea of replacing the USD with a basket of currencies.  Last week a Brazilian official made similar remarks with regard to the so called BRIC nations (Brazil, Russia, India and China).  These nations meet later in the month.

The combination of the news and the breaking of the 100 week moving average has pushed the EUR/USD to new heights.

The next target on the upside is the 1.4310 (the low from Dec 16th 2007), then 1.4363 (high from Dec 29, 2008).  Above that there is little resistance until 1.4620 level which is the 61.8% retracement of the move down from the 1.6037 high to the 1.2329 low (see chart above).

On the downside, the 1.4242 level (100 week MA) will be watched as will the 1.4183 which is the 50% retracement on the longer term weekly chart.

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