Euro rallies during Friday, to form a supportive candle for the week

The EUR/USD pair has gone higher during the day on Friday, rolling over to show signs during the Friday session of position squaring ahead of the weekend. However, the weekly candle is a hammer, and I think we may have a bit of a bounce, as the US dollar has been overbought. The 1.21 level above is massive resistance, and a break above there could free the market to go much higher, perhaps reaching towards the 1.32 level based upon the bullish flag on the weekly chart.

Otherwise, I think that the market will probably continue to be noisy, as is typical with a market that is traded by high-frequency traders as much of this pair is. I think that the market will course struggle the 1.20 level, but we have already sliced through the level couple of times now, so it will have lost some of its potency. If the market were to break above the 1.21 handle, that will probably send a flood of money into this market. Otherwise, I would be a seller of exhaustion as we have certainly seen a major breakdown as of late. That being said, we are at a crucial point and I think it’s only a matter of time before we have to make a long-term decision. The major support level underneath on a breakdown is the 1.15 handle, and that would be my target by the end of the summer if the sellers continue to run the show.