The EUR/USD pair rally during Monday trading, going straight up in the air initially. The Americans have pummeled the US dollar in this market, and therefore it looks likely that we will continue to see buyers jump in. I like buying short-term pullbacks as they offer value in a market that is clearly trying to form a longer-term uptrend. A break above the 1.1850 level should send this market looking towards the 1.19 level, and then eventually the 1.20 level after that. I think that pullbacks should see plenty of support near the 1.18 handle, and then perhaps again at the 1.1750 level.
As we reach into the holiday season, there will be more volatility in the Forex markets, and although this is the most liquid currency market, there will be a drop-off in volume going forward. Because of this, it’s likely that we will get some erratic moments during the holiday season, but that is typical. Make sure you keep your stop losses intact, and perhaps trade in a smaller position than usual. Longer-term, I do think that this pair goes higher and sometime in the beginning of the new year I anticipate that we will make a major breakout to the upside. Structurally speaking, we could be looking at a move to the 1.32 handle longer term. This is based upon a weekly bull flag that has shown it’s all, and I think that most of the world knows it’s there. Because of this, it becomes somewhat self-fulfilling prophecy.
Written by FX Empire