EUR/USD Price forecast for the week of February 5, 2018, Technical Analysis

The EUR/USD pair has initially fallen during the week but has turned around on Friday to show signs of life after the very negative move just after the jobs report came out on Friday. · FX Empire

Christopher Lewis

Updated Fri, Feb 2, 2018, 9:49 PM

The EUR/USD pair initially fell during the week but turned around to form a bit of a hammer, pressing up against the vital 1.25 level. If we can break out to a fresh, new high I believe that the EUR will continue to go much higher. I think pullbacks should find plenty of support underneath, as we have seen several times previously. The US dollar has been struggling overall, and this is the first Place the traders go to find a bit of reprieve from the greenback selling. Remember, the EUR/USD pair represents the overall value of the US dollar to most traders.

I believe that the 1.20 level underneath is the “floor” in the market, as it was the scene of a massive bullish flag. The bullish flag breaking out to the upside should send this market looking towards the 1.32 handle over the longer term, but obviously we need to pull back occasionally. By adding on dips, I believe that you can ride out the volatility of what I think is going to be a longer-term uptrend for the rest of the year. The pair has seen explosive growth as of late, so pulling back to take advantage of value makes a lot of sense, because we have gone as far as a short amount of time. Selling is almost an impossibility at this point, least not until we break down below the 1.20 level, and even then, I think there is plenty of support extending down to the 1.15 level.