The euro swirled back and forth in Tuesday’s negotiating session as we await the results of negotiations between the British and the Europeans. Ultimately this is a market that certainly looks bullish, but we might have an occasional pullback due to some type of risk. Below, the 1.21 area is relatively favorable, then below we have even more support near the 1.20 level which extends to the 1.19 level. In other words, there are many areas underneath that should continue to offer significant support that people will pay attention to. I continue to buy on the dips, but I admit there is going to be a lot of noise.
Video EUR / USD 22.12.20
On the upside, the 1.23 level appears to be very resistive, but it is also a target based on the bullish flag that has formed. The area between the 1.23 level and the 1.25 level certainly has a bit of noise, as we’ve seen a lot of trading in this general neighborhood. If we were to cross the 1.25 mark, the market could go much higher. All else being equal, I have no interest in shorting, unless of course we drop below the 1.19 level below. It seems very unlikely at the moment, but if we see a catastrophic problem or an extremely negative problem during the holiday period, we could get a sudden surge lower.
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