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

The EUR/USD pair drifted a bit lower during the trading session on Wednesday, reaching towards the 1.20 level. That’s an area that had previously been resistive, and now that we have fallen the way we did during the Wednesday session, we have filled the gap, thereby satisfying the typical technical analysis move. I believe that we are going to continue to go higher, perhaps reaching towards the 1.21 handle. A break above that level opens the door to a longer-term “buy-and-hold” scenario, and I believe that pullbacks continue to be buying opportunities in a market that certainly looks bullish.

If we did breakdown below the 1.20 level, that of course would be a negative sign, but I think there is even more support at the 1.19 handle. When I look at the longer-term charts, we have broken above the top of a bullish flag, and it looks likely to signal that the market could go to the 1.32 handle above. The volatility will continue, but I do favor the upside as the US dollar looks vulnerable to say the least. In general, I think it is a market that is trying to build up the momentum necessary to break out above the 1.21 handle, and extend gains much higher. I think that we are going to see a strong uptrend this year, but of course there will be various pullbacks and bumps in the road on the way to our destination.

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