The EUR/USD pair had an extraordinarily strong showing on Wednesday, as we finally broke above the 1.350 level. This area has been of particular interest to me, and just about everybody else in the Forex world, as it represents the neckline of a massive inverted head and shoulders. This inverted head and shoulders measures 15 handles fall, and as a result this opens up the door for a 1500 pip move.
With that being the case, this is one of those times when people will look back and say "if I only had bought back then." A lot of newer traders will look at a chart and understand that it looks simple afterwards, mainly because you can spot the reaction. I personally believe that this is one of the most major signals that I have seen in quite some time, with possibly the exception of the USD/JPY pair. Going forward, I plan on buying this pair every time it gets as long as we are above the 1.35 handle.
1.50 isn't as crazy as it sounds
The 1.50 level is essentially the top of a massive consolidation area that the pair has been stuck in for the last couple of years. Because of this, the move is and as crazy as it sounds. I know that there will be massive pullbacks from time to time, and I also personally remember how many people would talk about how "the trend is over" in this particular pair five years ago when we were grinding higher and higher. It seems like every couple hundred pips there's a pullback, and plenty of people willing to step in and proclaim that the markets about to selloff. However, I am looking at this from a longer-term perspective, and as much as I don't like the Euro or even the idea of it, I have to admit that is going higher.
Going forward, as long as we can see above the 1.35 level I don't see a scenario where one would start selling. This was also driven home by the fact that the Federal Reserve spoke on Wednesday of about how weak US economy is. A -0.1% GDP reading earlier in the day out of the United States certainly didn't help either. This all adds up to more printing by the Federal Reserve.