EUR/USD Price Forecast December 26, 2017, Technical Analysis

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The EUR/USD pair did almost nothing during the trading session on Friday as traders stepped away from the markets. Ultimately, this is a market that looks bullish longer-term, but right now we are looking at a market that is asleep. · FX Empire

Christopher Lewis

Updated Fri, Dec 22, 2017, 10:39 PM

The Euro has done very little against the US dollar during the trading session on Friday, as we hang about the 1.1850 level. The market has been very noisy over the last several sessions, as traders start to square their positions at the end of the year. I think that one of the things that you need to look at is the weekly chart, which is forming a significant bullish flag. Because of this, I believe it is only a matter of time before we break out to the upside, reaching towards the 1.20 level above. After that, the 1.21 level above is the next barrier, but if we can break above there I think that the market goes much higher and the bullish flag reaches towards the 1.32 handle given enough time. Because of this, I believe that buying short-term pullbacks and adding to a core position is probably the best way to deal with this market.

If we do get a breakout, I believe that most of 2018 is going to involve me adding to a position on short-term dips. I believe that this market is ready to make a significant move, and because of this the next couple of weeks could make or break the year for a lot of institutional investors. The 1.17 level underneath being broken to the downside would be negative, but I would not be concerned until we break down below the 1.15 level. If that gives way to selling pressure, the market probably goes back down to the 1.10 level after that.