The EUR/USD pair broke higher after initially pulling back on Wednesday, as it looks like we are ready to head towards the top of the consolidation area. That should have the market heading back to the 1.1450 level or so. If we can break above there, we feel that the market becomes a longer-term buy-and-hold type situation as the trend will have completely changed. Ultimately, this market can’t be sold until we get well below the 1.10 level. At that point in time, we would have to consider the market simply consolidating, but ultimately we feel that this market goes higher given enough time. We recognize that the Nonfarm Payroll numbers come out on Friday, so volatility could be the norm until we get that taken announcement out of the way.
If we do break above the 1.15 level, we feel that the trend will have changed and at that point in time we will start buying the Euro every time it pulls back. We think that may very well happen given enough time, as the market should continue to favor the Euro as long as situations in the European Union continue to improve. On top of that, there is the possibility that the Greeks will make their decision in favor of the Euro yet again, which of course is what we expect, and that of course will relieve a lot of pressure on the Euro in general.
The 1.10 level below should be essentially the “floor” at this point in time, and with that it is not until we get below there that we would consider selling this market. At that point in time, we would anticipate this market heading to the 1.05 level given enough time, as that would be the bottom of the recent consolidation area that is roughly 1000 pips high. That could be the summer range, so we have to keep that in mind, but at this point in time it certainly looks like there’s a lot of bullish pressure in this particular market, and think that it’s only a matter time before the breakout comes.