EUR/USD fell during the session on Thursday as the risk appetite waned a bit during the early hours. The pair then found a bit of legs later in the day, and as a result the pair formed a hammer in the end. This was the second day in a row that this pair formed a hammer, and this suggests to me that the pair will continue to gain over time. The Euro has been amazing to me as it seems like there isn’t a rumor too minor to push it higher.
The Spanish and Greeks have suggested that they are going to do some things here and there in order to get the next handout, and as a result, the markets seem placated for the moment. Nonetheless, it will only be a matter of time before the market begins to think about whether or not anything has really been taken care of. (It hasn’t.)
The pair has been one that has followed one headline after the other, and I don't think that there's any way that this is going to change in the near-term. The market has simply cheered this pair higher every time there was even the slightest hint of good news out of Europe, and as such it seems like there is a real aspect of "whistling past the graveyard" in this market.
1.33 is the top of resistance
Looking forward, the 1.30 begins a massive resistance area all the way up to the 1.33 area and I believe that we should more than likely find that this pair wants to reach that area, but it will be a serious grind forward. Because of this, I think that there will be easier ways to play the Euro than this market, but do have to admit that with the Federal Reserve expanding its quantitative easing program this will have put a bit more of a bid in this market that we may have had otherwise.
Going forward, I don't think selling this pair is feasible until we get well below the 1.2750 level, and as such I would be looking to buy pullbacks at this point. I think that this move will take quite a while, and as such this will be a short-term traders market over the next couple of months in my opinion.
