The EUR/USD pair fell during the balance of the session on Wednesday, but bounced just enough to form a candle that looks a little bit like a hammer. Quite frankly, I think this pair is going to continue going higher in the short term, but I actually do not like the Euro at all. This might be more of a technical bounce, but it does appear that we could rise to the weekly downtrend line above, which should put us at roughly 1.33 before this move is all said and done.
One of the biggest reasons I see this move coming is simply because we have recently formed three hammers in a row, something that hardly ever happens. That shows just how supportive the 1.30 level really is, and as a result I think every time we get close to that area there will be plenty of people trying to jump on the bandwagon and buy Euros.
Erratic and headline driven as usual
This pair is running on headlines usual, and with the Bernanke testimony in front of Congress, that was no different for the session. However, it should be noted that the Federal Reserve is "open" to possibilities with stimulus, as opposed to the Europeans its almost certainly going to have to do something. With that being the case, I still feel that eventually this pair will break down but obviously getting below the 1.30 level is going to be a real challenge at this point in time. I actually am waiting for a rally to start fading on signs of resistance, probably closer to that weekly downtrend line.
It should also be noted that on the longer-term charts, it looks like there is a bit of the ascending triangle, with the bottom out the now infamous 1.28 handle. If we get below there, I see aptly no reason why we can go down the 1.25 and possibly even lower. However, that is a longer-term outlook in this pair and until that happens, I can only speculate that it could possibly be where we are heading in the long-term.