The EUR/USD pair went back and forth during the session on Wednesday, eventually settling nothing but it did in the end form a slightly bearish candle. This bearish candle looks a bit like a shooting star so we could see a move lower, but I see the 1.37 level as being somewhat supportive, and a ton of support between here and the 1.35 handle. The 1.35 handle is the "floor" in this market going forward as far as I can tell, and because of that I think that the markets should continue to be somewhat supportive over the longer term.
The Europeans have recently just exited a recession, so I do believe that this market will eventually go higher anyway, as the United States isn't necessarily chugging along at a very impressive clip. The economy in America has been weak, although positive. Why frankly, a lot of what the people have been focusing on in the markets is that the United States is doing better than other parts the world, even though it's a relative battle of weak economies.
Pullback then burst higher.
I believe this market will pull back, and then eventually burst higher. That will probably be predicated upon the jobs number next week that should be relatively poor. If that's the case, the Federal Reserve will not be able to taper off of quantitative easing, and that of course will have this pair going higher because the US dollar simply will become less attractive. This will solidify the Euro as being the stronger of the two currencies, especially considering that it is the "anti-dollar", and as a result this market should extend the gains all the way up to the 1.40 level over the course of the next couple of weeks.
With that being the case, I am buying dips and show signs of support although we have not had that yet. I think this is going to be a buying opportunity before it's all said and done, and as a result I am looking for some type of supportive candle in which to start buying again.
