The EUR/USD pair shot higher during the day on Friday as Janet Yellen gave a somewhat dovish speech. Because of this, it’s likely that we will continue to see some bullish pressure, as we have made a fresh, new high. Looking at the longer-term charts, it’s likely that the bullish flag that has just been broken should send this market looking much higher. In fact, I have a longer-term target of 1.25. However, the meantime I think that the first major barrier will be the 1.20 level, and we could see a bit of resistance there. Nonetheless, pullbacks will end up being buying opportunities, as the European Union is starting to get close to normalizing its monetary policy. If the Federal Reserve blinks at all, that will send this market skyrocketing to the upside.
I think the pullbacks will probably be the way to go going forward, and that the 1.18 level should offer a significant amount of support. I think that the 1.19 level might be a short-term resistance barrier, but I don’t see anything particularly special about that level, and I think we will reach above there. Once we break above the 1.20 level, it’s probably time to start adding to your position, but in the meantime, I think that adding slightly on the occasional pullback is the best way to make this market work for you. I believe that the longer-term direction is certainly to the upside, and that the overall long-term trend has changed in favor of the euro. Because of this, I believe that the market should continue to see plenty of bullish pressure, and I have no interest in shorting this market anytime soon. That’s not to say we won’t get the occasional dip, but I won’t be biting on those opportunities.
Written by FX Empire