The EUR/USD pair rallied initially on Wednesday, but continues to find resistance above. I do think that eventually we go higher, but we need to break out to do so. It looks right now that the 1.1750 level is trying to offer a bit of support for a market moved to the upside, and eventually we should go to the 1.18 level. If we were to break down below the 1.1750 level, at that point I think that the market should then go down to the 1.17 level after that. Given enough time, I think that we reach towards the 1.20 level above, which had been massively resistive. When we broke out above the 1.15 level below, it was a multi-year break out that suggested a move to the 1.25 handle. I still believe we go there, but it is going to be very noisy between now and then.
I believe in buying dips, given enough time I think that they show plenty of support. I also believe that eventually a “buy-and-hold” strategy could work, but you would have to be able to deal with the massive amounts of back-and-forth that we see. Longer-term, I think that once we break above the 1.21 handle, the market should feel free to go much higher. I also believe that there is a lot of noise coming out of the Federal Reserve and the European Central Bank, so be aware of the sudden surges in both directions that we could experience. All things being equal, I am a buyer only but I also recognize that picking your spot will be important. Right now, I think the market is trying to get to the 1.18 handle, possibly the 1.1850 level. It won’t be easy though.
Written by FX Empire