EUR/USD forecast for the week of August 24, 2015, Technical Analysis

The EUR/USD pair initially fell during the course of the week but found enough support at the 1.10 level to turn things back around and form an extremely positive candle. With this, we are testing the 1.14 handle. This is the beginning of major resistance that could change the entire trend of this currency pair. If we can break above the 1.15 level, we not only are buyers at that point in time, but we are essentially in a “buy-and-hold” type of situation in our opinion.

This is very interesting timing though, because quite frankly we are at the very end of the summertime, which of course is typically low liquidity as a lot of the large players in the marketplace are simply out in the vacation mode instead of placing a lot of money in the markets. Ultimately though, the next couple of weeks will be very interesting and as a result it will be interesting to see whether or not we can break out to the upside. If we do, it’s only a matter of time before a lot of traders will look around and notice that the market is probably going to continue to go much higher.

We see a significant amount of resistance near the 1.25 level after that, and that would be our target over the next several weeks if not months. On the other hand though, if we get some type of resistive candle in this area, we could very easily see this market heading back towards the 1.10 level. The fact that we are at the end of the summer break suggests that perhaps the liquidity in the marketplace is a quite strong enough to make this something to be concerned about quite yet. However, we are getting very close to when large traders get involved in the market, and that of course would be more of a permanent type of move. The only thing that you can count on at this point in time is going to be volatility now.