The Euro dropped a bit during the trading session on Monday but found enough support underneath the 50-Day EMA to turn things around. By doing so, the market looks like it will try to get to the top of the negative candle on Friday.
Whether or not we can continue the upward momentum is a completely open question because we have seen a massive amount of downward pressure over the last couple of weeks. Those types of moves rarely happen in a vacuum.
If we break down below the bottom of the candlestick, then it’s likely that we would see the pair go down to the 1.06 level, followed by the 1.05 level, where we would see the 200-Day EMA come into the picture. Anything below opens up quite a bit of selling, perhaps down to the one 1.00 level, which obviously would attract a lot of attention.
Alternatively, we could turn around and break above the top of the inverted hammer from the Thursday session, possibly revisiting the highs again. If we do, then it’s likely that we would see this pair try to take off to the upside.
We need to see quite a bit of euro bullish pressure to make that happen and, of course, a major selloff in the US dollar. I don’t see that happening at the moment, and it does look like the US dollar is trying to come back in general. This has been a great bullish run for the Euro as of late, but it’s also worth noting that it pulled back from the 50% Fibonacci level.