Euro Continues Extension

The Euro continues its massive breakout, as it looks like we are heading straight towards the 1.15 handle. The big move that started on Wednesday looks as if it is going to continue, and therefore I think it is probably only a matter of time before we see the 1.15 level gets printed. The real resistance is probably closer to the 1.16 level, and as the US dollar weakens, it is very likely that we will eventually make that move. Pullbacks at this point in time should continue to offer value from everything I see, so most certainly I would pay close attention to what is going on.

EUR/USD Video 14.01.22

The 50 day EMA underneath is sitting right where we broke out of, so now I think it offers quite a bit of support. I would love to see some type of pullback in order to go higher, as it would offer plenty of value. Regardless, pay attention to the US dollar in general, because if it starts to strengthen that might kick off this pullback. If it continues to weaken against everything else, then the Euro by its very nature will almost have to go higher.

It is also worth noting that the 200 day EMA is racing towards the 1.16 level, so it is very possible that will be a major clash just waiting to happen. Ultimately, I do think this is a situation where you will see the markets try to get to that level, but it does not necessarily have to go straight up in the air. It will be interesting to see how this plays out, so pay close attention to the 10 year yield in the United States, as its falling it works against the value of the greenback as well.

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