The EUR/USD is moving higher, continuing the breakout that began late in Friday’s U.S. session. Thus far the EUR/USD is up 30+ pips on the day, currently trading around 1.1975. The key resistance level of 1.1900-1.1908 from last week’s call showed little validity. It is time to reevaluate this market and the overall condition of the USD.

Dallas FED Manufacturing Business Index

The Dallas FED released its Manufacturing Business Index a bit earlier today. The number is arbitrary in nature, but the metric came in at 17 over analyst predictions of 16.5.

Markets seem to have taken the number in stride as investors are looking for hints of future FED policy changes. For now, we have a slew of note auctions on the table for today. These auctions will become more and more relevant as we approach the end of 2017.

EUR/USD

As I mentioned, the topside resistance level around 1.1900 proved invalid. The daily chart is wide open to the topside. Next resistance is at the big round number of 1.2000.

EUR/USD Daily Chart: Rally, Rally, Rally!

The bullish trend for 2017 seems to have continued after a mid-August retracement to 1.1662. The long term prognosis is more weakness from the USD. The U.S. GDP statistics due Wednesday are likely to determine where we head from here.

Bottom line: I will be watching the 1.2000 level very closely. The EUR/USD is trading with momentum over last session’s high of 1.1940. Today’s close will give us some key levels to work with going into the GDP release.

If you are going to hold shorts amid this bullish pressure, watch the money management!