The EUR/USD pair initially fell during the week, dropping down to the 1.13 level underneath. However, we found enough support there to turn things around and form a massive hammer. The hammer of course it’s at the 1.14 level, and I think this shows that the market is trying as hard as I can do breakout to the upside. Move above the 1.15 level should send this market much higher, as it would be a break of a three-year consolidation area, and could send this market looking towards the 1.18 level rather soon. That would be a significant move, and that would have me becoming very bullish of the pair. Alternately, we could break down below the 1.13 level and that would be snapping the bottom of a hammer. That of course is a very negative sign, and should send this market down to the 1.11 handle.
Hawkish central banks
I think quite frankly both central banks are becoming a bit more hawkish, and therefore all things being equal we will probably favor the EUR as the markets tend to favor it and relatively strong economic times. Because of that, I think that a break above the 1.15 level is quite symbolic of where we would go next. A breakdown from here would show more continued concern and noise in the market, and I believe that it’s only a matter of time at that point where we would not only go to the 1.11 handle, but we would probably then go to the 1.10 level after that. Expect a lot of noise, but right now I would have to say that the buyers look like they are very much in control, and the candlestick for the week certainly does nothing to dissuade me from that thought process.
EUR USD Forecast Video 10.7.17
This article was originally posted on FX Empire