The EUR/USD pair fell during the session on Monday, testing the 1.1750 level underneath. That’s an area that was resistive in the past, and as I write this, we are starting to see buyers enter the market again. I believe that the most recent “higher high” dictates that this market should continue to go higher, and therefore I am bullish but I recognize that there will be a lot of noise.
Americans love the Euro
It seems to me that the EUR gets a lot of its gains during the US session, so it makes sense that I’m starting to see resiliency as we roll over into the New York session. Beyond that, breaking above the 1.17 level was psychologically significant, and I believe that some of the fear trade that had people buying the US dollar has started to wear off. Cooler heads have prevailed, as it’s obvious there will be some nuclear war in the Korean Peninsula. The scared money has left the market, and the longer-term fundamentals are starting to come back into focus. It appears that the European Central Bank is going to tighten its monetary policy, and it doesn’t seem particularly concerned about the increasing value of its currency. Because of this, I believe that this continues to be a “buy on the dips” type of market, and I think that the pair is going to go looking towards the 1.20 level above which is a psychological target to say the least. Ultimately, it’s not until we break down below the 1.17 level that I would start to consider a move back to the 1.15 handle, but currently it doesn’t look like were going to get that as the resiliency has proven itself more than once in this market.
Written by FX Empire