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The EUR/USD pair continued to March higher on Thursday, but gave back about half of the gains in order to close near the 1.2550 level. The market looks a little overextended at this point in time, and we are right in the middle of the massive resistance area going to the 1.27 level. With this being said, we think that it is only a matter of time before this pair searched the pullback, but the real question will be whether or not it actually breaks down.
We have yet to determine what exactly has changed in the Euro’s favor, and as such we think there will be a selling opportunity soon. Once we get above the 1.27 level however, we have to change her thesis and start buying. Truth be known, we find is very difficult to believe, but you never know what can happen in the Forex markets. A break below 1.25 would also have a selling.