Euro rallies on Tuesday

While not the most recent sensitive pair in the world, the EUR/USD pair certainly has a certain amount of that built into it. As trade seems a bit less threatened between the United States and China over the last couple of days, this pair has rallied. We have also bounce from a major uptrend line, and that should continue to keep a bit of positivity in this market. Keep in mind that if the trade situation seems to be stabilizing, that typically will have people selling the US dollar as they go around the world looking for more risk.

On a pullback, we should see plenty of support, lease down to the 1.2250 level. Breaking down below there could make things interesting, but right now it seems to be a bit less likely. The 1.25 level is massive resistance, but a break above there is what I expect to see over the longer term, based upon the weekly chart. The weekly bullish flag has been broken and suggested that we could go as high as 1.32 over the longer term, so keep that in mind. However, look for pullbacks for opportunities, but I would be cautious about jumping into the market, and would only add once the pair has moved in your direction. Be careful, but over the longer term you should be able to build up a reasonably decent sized position and ride out the volatility.