The EUR/USD pair fell initially during the Monday session but bounced in order to form a hammer. This hammer is at the top of a significant move higher, so it can be considered a sign of continuation. However, if we managed to break the bottom of this hammer this would be a very bearish sign and make the hammer a “hanging man.” This of course would be a very bearish sign.
However, if we managed to break the highs from the Monday session we think that this market makes another attempt on the 1.3150 level above. The level has been extremely resistive, and as such we don’t suspect that it will be broken through easily. Because of this, we may have a situation where you can buy this pair above the 1.30 level (essentially the highs from Monday) and then sell it about 150 pips higher.
Written by FX Empire