The EUR/USD pair as you can see broke higher during the course of the day on Tuesday, but ran into a bit of resistance at the 1.15 handle. With that being the case, the market should then make a decision at this point. Personally, I feel that the resistance is going to be a bit too difficult for the buyers to get above, and as a result I am looking for a selling opportunity. I think that the 1.15 level extends all the way to the 1.1650 handle, as it is more of a “zone” than anything else.
If we do break above there, there is even more resistant than the 1.18 handle, and that should extend to the 1.20 level. With that, I am essentially looking for selling opportunities going forward, and have absolutely no interest in buying this pair. In fact, it would take such a massive amount of bullish pressure right now to break out to the upside that it’s not even a thought.
1.20 is the key for a turnaround
I believe that it is not until we get above the 1.20 level that buying this pair is safe, or at least a safe as any currency trade can be. With that, I am essentially looking for selling opportunities but I am cognizant of the fact that if we get above the 1.20 handle, we would not only break above a large, round, psychologically significant number, but we would also clear a gap that started this last leg lower.
Nonetheless, I am willing to look at shorter-term charts for selling opportunities as well, especially at areas such as the aforementioned 1.15 level that we are testing at the time of writing this article. Ultimately though, I think that the market still need to get out to the 1.10 level but it could be somewhat choppy on the way down there. However, the US dollar is by far the strongest currency in the world right now, so it is difficult to imagine that we are going to do anything but test those lows.
