EUR/USD Price Forecast December 14, 2017, Technical Analysis

The EUR/USD pair continues to be very noisy, but it looks as if we are trying to form some type of supportive area in this region. On the weekly chart, I can make an argument for a significant bullish flag, and that should send this pair much higher over the longer term. If the Federal Reserve sounds more dovish than anticipated during the interest rate statement, it’s very likely that this pair will skyrocket to the upside as the ECB is going to step away, or at least cut back on, some of the quantitative easing fairly soon. Markets tend to look into the future, and that is the biggest argument for the buyers in this pair that I can see. Beyond that, during the session on Wednesday Senator Jeff Flake suggested that he may not sign the tax reform bill, and that could cause a little bit of concern with the US dollar as well.

If the central bank in America is much more hawkish than anticipated, that could turn this market around. Therefore, I believe that waiting until we break above the 1.18 level is probably the way to go in this market, as it would show a clear break above significant resistance. That break could lead to much higher levels, perhaps the 1.20 level next, and then eventually the 1.21 level which was massive resistance. For what it’s worth, the potential bullish flag that we are forming on the weekly chart measures for a move to the 1.32 handle, but that’s obviously looking way out into the future, and not today. A breakdown would more than likely have this market looking for the 1.15 handle.

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