The EUR/USD pair rose during the course of the day on Friday, but as you can see still struggles with the 1.30 level as resistance. Interestingly enough, the weekly candle is a hammer though, so it is very possible that we are going to go higher. Without a doubt though, I believe that we need a break well above the 1.30 level in order to feel comfortable enough to start buying. With that, I expect the market to head to the 1.3250 level, an area that started out the week with a gap lower. That should be resistance, so I think that the move higher is probably going to be more or less a short-term event. However, there is the possibility that we go higher than that, if we clear the 1.33 level, at that point in time I would become bullish of the Euro. However, I don’t think that’s likely to happen anytime soon.
Markets don’t go in one direction forever.
Markets never go in one direction forever, so I believe that we are probably due for a bounce. With that being the case, I’m not necessarily looking to sell this pair, because I recognize that the 1.28 level below is so massively supportive. I think that the market will struggle to break down below there without some type of massive momentum gathering, which is going to need perceived value in the US dollar, as this market rises.
This looks to me like the usual ebb and flow of markets, and to bounce from here should simply offer the opportunity to buy the US dollar at a lower level, or sell the euro at a higher level. Same thing really.
That being said, if we do break down below the 1.28 level, I believe that the market would enter a bit of a freefall, so that being the case I would have to become not only bearish of this market, but extremely so. A doubt that’s going to happen right away, but that is what I do think will eventually happen, after the nice bounce that offers the short-term opportunity.
