The EUR/USD pair shot through the roof during the day on Thursday, as news came out that investigators are expanding their search into Donald Trump’s global companies for collusion with Russia. Quite frankly, this announcement really wasn’t anything out of the norm, because quite frankly there are plenty of international companies that the man owns. They aren’t suggesting that they are found anything, just that they would consider these companies. As a result, the US dollar sold off rather rapidly, and we have seen an impulsive move to the upside. Nonetheless, this was a technically bullish market anyway, so the reason doesn’t really matter.
Buying pullbacks
I believe that buying pullbacks will be the way going forward, and that the 1.15 level is now the “floor” in the market, although to be honest I doubt we will reach that level anytime soon. The top of the current consolidation area on longer-term charts is closer to the 1.1850 level, so I feel that’s where were going to go looking. Buyers continued to push, and therefore I look at dips as opportunities to pick up value in a currency that has been undervalued for several years. The bond situation in Europe seems to favor the Europeans, at least over the Americans. That’s another reason this market should continue to go higher. I’m not looking for some type of massive moved to the upside, just a general and gradual moved to the upside. If we did breakdown below the 1.15 level, that would be a very negative sign, as it would show a complete capitulation of the most recent support level and of course an area where we had broken out of just a handful of sessions ago. Nonetheless, my base case scenario is that we continue to go higher.
Written by FX Empire