The EUR/USD pair continues to be noisy, but Monday was positive. By struggling like we did, it looks like we may have to pull back short-term to build up the momentum to break above the 1.2350 level. Once we do I expect this market to go to the 1.240 level after that. I don’t have any interest in shorting this market, there’s a nice uptrend line underneath it continues to offer support, and I think that most traders will look at pullbacks as an opportunity to pick up this pair “on the cheap.” With that being the case, I’m looking at pullbacks as an opportunity to pick up a position, and then a breakout above the 1.2350 level as an opportunity to add to a position as we continue to build up momentum.
If we were to break down below the uptrend line underneath, that could be a very negative sign, perhaps sending us down to the 1.21 handle after that. That’s an area that should be massively supportive, and I think that breaking down below that level could put the entire uptrend in jeopardy. I don’t expect that to happen though, and I think that it’s only a matter of time before the buyers return. Ultimately, the 1.25 level above is a major resistance barrier, but if we can break above there it’s likely that we will be free to go much higher, perhaps extending the overall uptrend that I believe extends to the 1.32 level based upon longer-term charts.
Written by FX Empire