The EUR/USD pair broke above the 1.3150 level at the end of the session on Friday, signaling a new leg of in this currency pair. Is because of this that we think a break above the highs from the Friday session will signal that the pair is prepared to grind higher, and aim towards the next major resistance area in the form of the 1.340 level. We actually believe that we will eventually at 1.35, but it will be a grind, not a shot straight up.
This is mainly predicated upon the Federal Reserve and its quantitative easing policies, and the fact that the European debt issue seems to be in the back burner right now. Going forward though, there will be shocks to the system that will cause this pair to be erratic at times, especially considering that we are in the last two weeks of the year which of course is typically low-volume trading.
Written by FX Empire