The EUR/USD pair initially fell during the course of the session on Friday, but found enough support at the 1.13 level to find buyers and went higher during the day. That being the case, we ended up forming a hammer, and that hammer of course is a very positive sign. The shooting star above from the Thursday session of course gives us a bit of resistance that shows the market is going to continue to struggle. Ultimately though, when I see a shooting star and then a hammer, I expect the marketplace to go back and forth in a very tight range.
With this, I believe that it’s only a matter time before we have to make a move, and I’m actually believing at this point in time that the Euro will break out to the upside. However, we would have to break above the 1.15 level in order to “break free” of the massive resistance barrier above. Once we do, then I believe that it is a buy on the dips type of mentality that will enter the marketplace.
Pullbacks are buying opportunities as well
I believe the pullbacks will continue to be buying opportunities as well, as there is a massive amount of support all the way down to the 1.12 level below, and the 1.1 level below there. Ultimately, the 1.10 level below is massively supportive also. In fact, I can even make an argument for not selling this market until we get below the 1.09 level, which is something that looks very unlikely at this point in time. I believe that this market will go higher eventually, but you are going to have to be very patient to wait for the market to break out.
If we break above the 1.15 level, I anticipate that the entire trend will change, and then at that point in time I believe that this market will eventually head towards the 1.20 level, and much higher than that. The Euro has been sold off far too much over the last couple of years, and perhaps this bounce is overdue.
