EUR/USD Analysis
With the EUR/USD chart currently in consolidation mode due to the lack of flows during the holiday season, time to take a step back and analyse the overall picture.
Though the chart looks decidedly bearish with the fall from around 1.49 extending to 1.2940, I’m going to put my contrarian cap on and be in dip buying mode heading into the new year. From the chart shown above, strong support is seen immediately below, and the Euro will find a grateful buyer in me hoping to pick up a few positions from any dips through 1.30 down to 1.2850.
A daily close below 1.2800 will therefore negate my view, and I will then scamper off with my tail between my legs, and liquidate my open positions and cut my losses.
Assuming it goes as planned, and the Euro rises higher, my sights will then be set on exiting a small position at 1.33 as a first target, 1.35 as a second target, and letting a small core position run with all positions being closed if we do get to 1.3780-1.3800.
With the COT Report showing leveraged players being very aggressively short against the Euro, unwinding positions due to an increase in broad risk sentiment in the new year could see the Euro rise very quickly.
Of course, the above views come from a purely technical perspective.
Fundamentally, the overall picture can change in a blink of an eye. :33:
That’s why it’s important to have plan. And equally as important, sticking to it.
