The EUR/USD pair initially fell on Thursday, but found enough support near the 1.1725 level to turn around and bounce. We had formed a “W pattern” on the hourly chart, and it looks as if the buyers are trying to make some type of stand here. Because of this, I think it’s only a matter of time before we reach to the upside again, as ultimately the EUR is in an uptrend against the US dollar. This has been a brutal couple of sessions, but longer-term I think that we will go back towards the 1.20 level above, and then eventually the 1.25 level based upon the longer-term consolidation that we have recently broken out. If we do break down from here, it’s likely that we will find more than enough support near the 1.15 level, and I think that would be a “make it or break it” level in this market.
Ultimately, I believe that the market is one that will continue to favor the upside, and therefore I think that if you are patient enough you should get nice buying opportunities. I believe that the volatility in this market will continue, but this is because there are a lot of concerns when it comes to the global economy in general. The European Union seems to be doing better, so I believe that ultimately people will be looking to buy. However, in sudden “risk off” moves, we could turn around and reach towards the US dollar as it represents safety in the form of treasury markets. The German economy has been picking up lately, and it looks likely that the euro itself will follow as Germany as such a large part of that economy. Expect volatility, but I still like the idea of going long in this market for the longer term.
Written by FX Empire