The EUR/USD pair went back and forth during the trading session on Thursday, bouncing around the 1.18 level. At this point, I suspect that the market is going to try to form some type of base, perhaps breaking above the 1.18 level and then reach towards the 1.1850 level after that. If we can clear that level, I think that the market should then go to the 1.1933 handle. Longer-term, I am still looking for a move towards the 1.21 handle, but I recognize that there is a lot of resistance in that area, and a break above that level should continue to go much higher, perhaps in a “buy-and-hold” direction. A breakdown below the lows of the trading session will more than likely send the EUR looking towards the 1.17 level which I feel is even more important, and should be massively supportive.
In the very unlikely circumstance we break down below the 1.17 level, then I think the uptrend is over. We have seen a nice pullback over the last several sessions, but there is a massive gap above that the market has yet to fill, something that it will typically do. Because of this, I am willing to take a long position once we get the signal that I have laid out, and I do believe that at the very least we will go to the 1.19 level to fill that gap. I think that volatility continues to be an issue, but longer-term the buyers should come out on top.
Written by FX Empire