EUR/USD Price Forecast January 18, 2018, Technical Analysis

The EUR/USD pair initially tried to rally during the trading session on Wednesday, but then broke down to reach towards the 1.22 handle underneath. I think that’s an area that should continue to be an area of interest, but quite frankly the more important support level underneath is the 1.21 handle, so even if we break down I’m not interested in selling quite yet. I look at pullbacks as an opportunity to take advantage of value. The market looks as if it is trying to catch its breath, so I think it makes sense that we are trying to solidify the recent gains.

If we can break to a fresh, new high, the market should then go to the 1.25 level next, but it won’t necessarily be the easiest moved to make. I suspect that the 1.25 level is going to be very difficult to break, so it may take several attempts. If we did breakdown below the 1.20 level, I think that would be enough psychological destruction to the uptrend to send this market much lower. I don’t think that’s going to happen, but you should always pay attention to the alternate scenario, because you cannot assume that your bias is always correct.

I anticipate that we will probably see a couple of days of grinding, and then an impulsive move towards the later part of the week. In the meantime, I retain an upward bias so therefore will position myself accordingly.