EUR/USD Price Forecast December 4, 2017, Technical Analysis

The EUR/USD pair initially fell during the trading session on Friday, reaching down towards the 1.1850 level before bouncing significantly. As we are approaching the end of the trading session for Europe, the market is rallying significantly, and looking very likely to go towards the 1.20 level above. The 1.21 level after that is even more significant, and a break above there could send this pair much higher over the longer term. That is my thesis given enough time, but I also recognize that there is a lot to work through. Most of this news is due to General Flynn suggesting that he would work with prosecutors against the White House, and therefore people were getting concerned about the US dollar. In general though, I think that these things have a way of correcting themselves, so this knee-jerk reaction could very well pull back. That pullback should be a buying opportunity, and that should be the better trade to take as the last few minutes has seen a move of over 60 pips.
I believe that the 1.18 level underneath is going to continue to be a bit of a floor, and given enough time we will continue to go much higher. I don’t think that the markets are going to break above the 1.21 handle during the session on Friday, and I think it will take a certain amount of strength to do so. The potential of a constitutional crisis has people reacting first, and thinking later. There is a long way to go in this scenario, so with this being the case it’s likely that the markets will correct given enough time.