By: DailyForex.com
During the session on Monday, the EUR/USD pair fell immediately. However, we did bounce off of the 1.08 handle, and as a result should signs of support. I am a bit interested in what has transpired, only because the 1.08 level has previously been supportive in the past. We have the ascending triangle which as you can see is still marked on my chart via the blue uptrend line. This is confirmed resistance from the massive move on Friday, but it appears that the market is going to try to make a serious attempt to break above there. If we do, that of course would mean something.
I think if we break above the ascending triangle uptrend line, this has completely blown out the idea of a breakdown. If we can break above the 1.10 level, I believe at that point in time the market should continue to go higher and reach towards the 1.14 handle.
Significant Levels
I believe that in this general vicinity, we have several significant levels. I believe that all of them combined will determine which way the market goes longer-term, and as a result I am looking at a couple of different areas for signals as to which direction to trade this pair.
I think that if we can break above the 1.10 level, you have to start going long off this market. I believe that it can also signal that perhaps the uptrend will continue, and as a result longer-term we may have seen the bottom of the Euro. On the other hand, if we break down below the bottom of the hammer candle from Monday, we could see this market reach back down towards the 1.06 handle. It’s hard to imagine what happens between now and then, so quite frankly I am stepping away from the market until we break out of this small area. The one thing you can count on though is volatility.
