Euro showing signs of significant strength during Monday trading

The EUR/USD pair has rallied significantly during the trading session on Monday, reaching towards the 1.24 level, an area that will more than likely cause a bit of resistance as it is a large, round, psychologically significant number. Short-term pullback should be buying opportunities, and I believe that the 1.2350 level will probably offer support as it was previous resistance. If we can break above the 1.24 handle, then I think the market should then go to the 1.25 level. That’s an area that will be crucial, but if we can break above there and then the market will find its way towards the 1.32 handle, something that I have been calling for some time now. This is based upon a breakout above a bullish flag on the weekly chart, and I think that if we can clear the 1.25 level, we should see a lot of fresh money coming into this market.

When you look at the chart, you can also see an uptrend line that finds itself somewhere near the 1.23 level, so it’s not until we break down below that level that I’m comfortable shorting for any length of time. I believe that value hunters should continue to come back into the market based on these dips, and a pullback from the high levels should attract value hunters coming back into the marketplace. Ultimately, I believe that this pair is one that will continue to thrive if we can avoid a trade war, or an escalation of the conflict in Syria.

Written by FX Empire