The EUR/USD pair went back and forth during the session on Monday, printing a slightly positive candle but at the end of the day didn’t show much in the way of conviction as far as its bullishness. Going forward, I believe that if we can get above the highs from last week, this market will continue to go much higher. In fact, there is a downtrend line from the monthly timeframe that would be broken at that point in time, and that should send the market looking for the 1.50 handle given enough time. Nonetheless, in the meantime I believe that the market will continue to train grind higher, and that is a very bullish sign. After all, the market is essentially “getting used to” being up here.
That’s not to say that it’s going to happen soon, in fact we could very easily pullback here. But I think there is a significant amount of support all the way down to the 1.38 level to keep me buying this market on pullbacks. It really isn’t until we get below the 1.37 level and I could see selling this market as it would be a continuation of the downtrend channel that the market has been working with since the beginning of the financial crisis.
Economic numbers out of Europe picking up a little bit.
The economic numbers out of Europe have picked up a little bit here recently, so would not surprise me at all to see this market continue to go higher. It’s not necessarily that the Federal Reserve isn’t going to continue tapering, and that it won’t have some type of positive effect on the US dollar, it’s just that with economic numbers thinking about if Europe, there’s a real chance that the interest-rate differential will remain roughly the same between the Euro and the Dollar. With that, this pair should continue higher as it is one of the main drivers of currency pairs, and as a result I am relatively bullish. However, we are essentially only one bad headline to scare the markets back into the Dollar.
