The EUR/USD fell a bit during the trading session on Friday, as we are looking at the 1.08 level as a decision point. At this point, the market is likely to be more of a “buy the dip” attitude, but it’s probably worth noting that Monday could be a bit of a strange day as it’s a bank holiday in the United States, meaning that we will only have about half of a normal day.
The shape of the candlestick is essentially a hammer, so it suggests that there are buyers underneath willing to get involved. However, if we break down below the bottom of the candlestick, you could make a significant argument that it is a “hanging man” candlestick pattern. The market breaking below there could open some selling pressure, but at this point, I think it’s obvious that the Euro is certainly in the good graces of most traders.
Waiting for a Short-term Pullback
- It’s worth noting that the European Central Bank is suggesting that they are going to remain tight for the foreseeable future, and that has been part of the reason why traders have been buying the Euro.
- The Federal Reserve is likely to be tight going forward as well, but it seems as if the Federal Reserve is being pushed around by the market to force the idea of looser monetary policy.
- Whether or not that’s going to be the case is a completely different question, but at this point, I think you’ve got a situation where we are going to make a longer-term decision rather soon.
The “golden cross” that we had seen recently is a very bullish sign, as the 50-Day EMA has broken above the 200-Day EMA. I would look at the 50-Day EMA as a moving floor in the market, so therefore I will be watching it quite closely. Nonetheless, this is a market that is probably due for some type a short-term pullback, but as far as selling is concerned, I think it’s going to be difficult to do. If we break above the highs of the last couple of days, then it’s likely that the Euro will go looking to the 1.10 level above, based upon the longer-term charts and of course previous resistance. All things being equal, this is a market that looks like it’s leaning to the upside, but it needs some type of push.
Ready to trade our daily Forex analysis? We’ve made a list of the best Forex brokers worth trading with.