The EUR/USD pair rose during the session on Tuesday, breaking the top of all three of the previous hammers that had been printed on the daily chart. We had suggested that the 1.30 level is going to be very significant in its support, and now that this move has happened, we feel that has been validated. However, one of the things that we are very cautious about is the fact that the Euro seems to have negative headlines following it every once in a while.
The pair will more than likely find significant resistance above, especially the closer that we get to the 1.33 handle. That level is going to be bumping into a weekly downtrend line, and because of that we should continue to see back-and-forth action overall. We certainly recognize the fact that there is a short-term buying opportunity here, but in the end we think that the market will continue to be very choppy overall.
When you look at the longer-term charts, you can actually discern a little bit of an ascending triangle at the moment that has a base at the 1.28 handle. That triangle could see this market falling quite a bit from here, and because of that we feel that this market will more than likely finally breakdown and head towards 1.25 handle. However, we don’t think that’s going to happen anytime soon as the Euro seems to attract some of the most optimistic traders on the planet. Going forward though, we think eventually something’s going to happen to have this market selloff again. As you can see the red downtrend line on the chart, you can see that there is a significant chance of a little bit of a selloff if we get that high. We would not hesitate to sell a resistive candle if there, but also recognize the fact that 1.30 has now proven itself to be rather supportive. With that being the case, we think it’s a short-term buy, and then eventually a longer-term sell. However, you must be aware the fact that this pair is heavily influenced by headlines these days.
Written by FX Empire