The EUR/USD pair initially fell during the session on Wednesday, but found enough support near the 1.3780 level to bounce and break significantly higher during the session. As the day is closing out, we are closing at the 1.3850 area, an area that should have a significant amount resistance above. Pullbacks at this point time will probably be likely, and perhaps even necessary in order to bring enough momentum into the marketplace in order to break above the 1.3850 region. Above there, I think that there’s a lot of noise all the way up to the 1.3950 area, which is massively resistive.
The area above will likely give way eventually, binds I feel that it’s going to take a significant amount of momentum to finally do so. A pullback from here more than likely should find buyers though, especially as we approach the 1.38 handle again. It is down in that region that I would anticipate seeing a supportive candle that could be bought, as we continue to go higher.
Breakout?
If we can get above the 1.3950 level, I believe that we will eventually break out above the 1.40 level. Because the fact that a longer-term downtrend line from the monthly chart appears somewhere in that general region, I believe that a move above there would in fact be very bullish. It would eventually lead us to a buy-and-hold market, which of course would be nice finally as perhaps we can finally get a decent trend, something we used to enjoy for years on end.
I see absolutely no reason to sell this market right now, and any pullback here should get buyers involved. A really isn’t until we break down through the bottom of the Friday hammer that I feel selling is a viable in this market. After all, we have had a decent move higher, and we of course bounce from the 61.8 Fibonacci retracement level during that session. Ultimately, I do think that we go higher but more than likely it won’t necessarily be the cleanest are easiest trade to hang onto. Most traders that make money in this market will probably be doing it from the long side, and on short timeframe charts.
