The EUR/USD pair rallied during the session on Friday, but gave back quite a bit of the gains after the nonfarm payroll number came out better than anticipated.The EUR/USD pair rallied during the session on Friday, but gave back quite a bit of the gains after the nonfarm payroll number came out better than anticipated. However, one thing that is being overlooked is the fact that we are approaching a significant amount of resistance. In fact, the trend line that is shown on the chart is from a monthly downtrend channel. This channel started at the beginning of the financial crisis, so it is indeed major in its implications
The fact that we formed a shooting star tells me a lot that this is going to be no easy task to break out to the upside. Because of this, I believe that this market ready to pull back, but this is probably more or less going to be a short-term move. I still believe that there’s plenty of support below, so we will have to wait and see.
This could be the beginning of something significant.
If we can break above the highs from the session on Friday, I believe that this could be a massive move higher waiting to happen. This would be a massive buying opportunity in my opinion, and could send this market going as high as 1.50 over a longer period of time. Don’t get me wrong, there will be pullbacks from time to time, but ultimately a buyer will step in and push this market higher. There is plenty of support going forward, as many other traders will be out there recognizing what is just happened.
This can be attributed partially to the fact that the European Central Bank failed to mention any type of monetary policy in the form of easing this past week, and as a result I believe that the Euro will more than likely continue to go higher. This is going to be accelerated by better than anticipated European economic numbers, which we have gotten recently. The Federal Reserve of course is tapering off of quantitative easing, but in the end it there is still going to be a positive interest-rate differential for the Euro. As long as that’s the case, I believe that this market will ultimately continue higher.
