The EUR/USD pair broke higher during the course of the session on Friday, clearing the top of the shooting star from the Thursday session. That being the case, the market looks as if we are going to continue to try to break out to the upside, and with that we feel that this market should continue to go higher given enough time. However, there is a massive amount of resistance all the way to the 1.15 handle, so at this point in time it’s not a given. I believe that this market will eventually break out to the upside based upon the longer-term ascending triangle but at this point in time we are nowhere near breaking out above that. We would need to go above the aforementioned 1.15 level to actually break out at this point in time.
Short-term consolidation
The short-term consolidation that this market has been in for some time was finally broke on Friday, as the 1.14 level was the previous support and the 1.13 level was the previous resistance. With that being said, the market looks as if it is starting to gain momentum to the upside, but with all the noise above I am still a bit hesitant to get overly excited. Yes, perhaps a longer-term small position could be put on at this point in time to the upside, but you have to realize that there is going to be quite a bit of volatility between now and then.
A pullback at this point in time should be thought of as value, as the Euro is most certainly favored over the US dollar at the moment. I believe that ultimately once we break out it is a trend change that can be bought for the long-term and a lot of careers can be made from that particular move. It is not until we break down below the bottom of the ascending triangle which is marked on this chart as the uptrend line that I would consider selling at this point in time.
