FXStreet (Delhi) – Research Team at Goldman Sachs, suggest that EURUSD is now looking increasingly “trend-ready”, and suggest that this is a sensible time to trust breakout moves. Key Quotes “The spread between all four of the moving averages has reached historical extremes. The narrowest point reached 0.0088 on Oct. 1st, and it has gradually widened every day since.” “Typically when moving averages converge in this way, it is because price action has been range-bound and static for a little while. It is common to see this sort of behaviour right before the development of a trend. In many ways, this occurrence mimics the suppression of volatility and suggests that the market is getting ready for a breakout.” “The last time EURUSD’s moving averages reached/held near similar levels was on Jun. 9th ‘14 when the spread got to 0.0102. The eventual breakout move was lower and the trend was very strong.” “Looking at EURUSD going back to the early-‘90s, almost all compressions under 0.01 have resulted in some kind of breakout move. Although the direction of the trend isn’t determined by this occurence, the fact that the market is getting “trend-ready” is important information.” “The more important pivot below there is an ABC from the Aug. 24th high at 1.0871. Chances of an impulsive decline developing will be increase significantly below this pivot. The target on a break should be 1.0479; a 1.618 extension taken from the August high.” For more information, read our latest forex news.