The EUR/USD pair went back and forth during the session on Friday, essentially settling nothing by the time the market closed. The 1.39 level did in fact offer enough resistance to keep the market somewhat lower for much of the session, but this really is an overly surprising considering how parabolic the move has been over the last four sessions previously. With that, it appears of the market will more than likely have to take some type of break going higher, and that makes sense to me as markets never go in one direction forever anyway.
I think that there are plenty of supportive areas below, with the 1.38 level being the most obvious one in the near term. What’s interesting to me is that if we can break above the 1.3950 level, we are cracking above the downtrend line from the monthly chart that started back during the financial crisis. If we can break above that trend line, I believe that this market could be a long-term buy-and-hold type of situation, the best market condition to be in.
With this being said, I feel that this market will ultimately offer huge rewards.
I feel as if the Euro is going to continue to go higher given enough time. I don’t know that’s going to happen now, that’s why am waiting for a move above the 1.3950 handle, and quite frankly would more than likely be apt to wait until we get above the 1.40 level, because not only with that break the downtrend line, but would also break above a significant psychological barrier as the number is a large round number.
Going higher, I think that the market will continue to struggle from time to time, but this pullback should offer buying opportunities as this pair typically trends for years at a time. We may actually be seen a bit of a trend change, as a monthly trend line is something that doesn’t get broken very often. If we fail up here though, we could fall significantly. Because of this, I am cautiously optimistic, but waiting to be proven correct.
