The EUR/USD pair rose during the balance of the session on Tuesday, but ran into trouble right around the 1.38 handle. This area is what I need to see broken to the upside on a daily close in order to continue higher, so the fact that we pulled back from this area and formed a shooting star suggests to me that we could see a little bit of a pullback over the next couple of sessions. Alternately though, if we do manage to break above the 1.38 handle on a daily close, that would not only trigger my buy order, but it would also signify real strength as we broke the top of that shooting star.
The pullback should only be a buying opportunity. Ultimately though, as I believe the Euro should continue to go higher. The 1.36 level should offer quite a bit of support, and because of that I think that anywhere between here and there that we get a supportive candle, buyers will step into the marketplace in order to take advantage of what is an obvious uptrend at this point in time.
This pair will be about American jobs more than anything else.
Remember, the world still wonders about the American employment situation, and whether or not the Federal Reserve can taper off of quantitative easing. They will not be able to do so until they get employment numbers that suggests the economy is turning around. If we do get a strong jobs numbers in the future, that could turn this pair around drastically, but in the meantime, I don't think that were going to see any type of meltdown between now and the end of the year.
If we get above the 1.38 level, and I do think we will eventually, the market should head to the 1.40 handle, where will face a large, round, psychologically significant number. Above there though, the market really could take off to the upside, but that's probably something that we will see in 2014, not anytime soon. As for shorting is concerned, we would have to get below the 1.3400 level.
