The EUR/USD pair has drifted a bit lower during the trading session on Wednesday, breaking down below the 1.2250 level, and reaching towards the 1.22 handle. There is a significant amount of support down to the 1.21 handle, which was previous resistance, and the scene of a major breakout. Because of this, I’m waiting for an opportunity to go long of this market, as I believe that not only does the 1.21 level offer significant support, but so does the longer-term uptrend line below there, so I think it’s only a matter of time before the buyers get involved. I’m waiting for some type of daily supportive candle, or a hammer, something like that to get involved.
I think that the market will then go looking towards the 1.25 handle, which has been massive resistance. If we can break above there, then I think we continue to go higher, reaching towards the 1.32 level longer term. Alternately, if we were to turn around and break down below the 1.20 level, the uptrend is over, and we should continue to go much lower, as it would be a major breakdown of support. Ultimately, I think that the next couple of sessions will be crucial, and that will tell is where were going to go longer term. With this type of action, I think if you are patient enough, we will get some type of impulsivity that tells you which way to trade, and you can simply hang on for the next several handles.
Written by FX Empire