The EUR/USD pair initially fell during the session on Thursday, but found a little bit of support below the 1.07 handle. By doing so, the market broke back above the 1.08 handle, which of course is a fairly bullish move. However, I’m not too excited about this because I still maintain that there is a massive amount of resistance above, especially once you get to the 1.10 handle. On top of that, you have the 100 day exponential moving average just above, so more than likely I believe that sellers will step into the marketplace later in the day.
Besides, would you want to hold the Euro over the weekend? I think a lot of traders are going to be concerned about doing just that, and selling late in the day. I could be wrong, but either way I don’t think there’s going to be a sudden rush to own the Euro on a Friday if you don’t already do so. In other words, it’s going to be hard to carry on this momentum and last there’s some type of announcement or headline that pushes the market higher.
Resistance zone
Looking at the chart, you can see that I still have the yellow rectangle placed on it. I believe this is the resistance zone, and as a result even if we managed to break over the 1.10 level, there’s still good chance that I think the sellers will appear. I don’t think that will happen, at least not as far as breaking above the 1.10 level, but I really don’t see this pair being free and clear to own for any real length of time until we get well above that yellow box. I believe that we will go back down to the 1.05 handle given enough time, and I still feel that we may go as low as parity. However, it will be a struggle and I think that the easy money has already been made in this pair. Regardless though I’m still bearish overall.
