The EUR/USD pair initially fell during the day on Wednesday, but as you can see rose later in the day to test the 1.14 handle. Because of this, I am starting to believe that the breakout is imminent, and essentially what we are doing is waiting to see whether or not we can build up enough momentum. If we can break above the 1.15 handle, I think that all vestiges of a downtrend are officially dead, as we will have formed a massive W pattern. I believe that it is coming soon, it’s just a matter time.
It comes down to what your timeframe as, but quite frankly I am buying dips as we go forward. I believe that it’s only a matter of time before that breakout occurs, so I’m not even looking to sell at this point. I believe that the 1.10 level is the “floor” in this market, but to be honest I would be very surprised if we got down to that level.
European Union strengthening
The economic numbers out of the European Union have been strengthening recently, and as a result I believe that the Euro will continue to strengthen as well. The move above the 1.15 level will more than likely coincide with a significant break well below the 93.50 level, in the US Dollar Index. I think that the US Dollar Aimed DAX is telling us that this pair will break to the upside soon. In fact, we could be seeing this in the next couple of sessions. Any pullback at this point in time should be bought, as I think we are essentially just trying to break over the massive barrier. It takes time to do these things, especially when you’re talking about changing the trend overall. It’s always messy when it happens, and this turn of events certainly won’t be any different than any other trend change. At this point in time, I think the downtrend might be dead.
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