The EUR/USD pair rallied during the day on Tuesday, breaking above the 1.15 handle. We broke above there, pulled back to find support, and then continue to go even higher. This is a major break out as we have been consolidating with the 1.15 level being massive resistance for almost 3 years. This breakout marks a sea change of attitude when it comes to this market. The market looks likely to continue to find buyers on dips, and now it looks as if the 1.18 level above will be targeted. It appears that the US dollar is on the defensive overall, as we are starting to see struggles in Washington DC as far as passing legislation going forward. I believe that the market will continue to favor the EUR overall, and therefore every time we pull back its can be a nice buying opportunity. The top of the next consolidation area from history is the 1.1850 level, so given enough time I think we will go looking for that level.
I look at dips as value. The EUR is a currency that has been beaten down over the last several years, and it now looks as if that is over. Because of this, the market should continue to go even higher, and I think that given enough time we will probably break above the 1.1850 level. Once we do, the next target of course will be the 1.20 level, as it is a large, round, psychologically significant number on the longer-term charts. Markets continue to be choppy, but overall, I think we have made a serious statement during the Tuesday session as we will start to see the overall trend change longer-term, and quite frankly I think this could be the beginning of a major change in the market.
Written by FX Empire