The Euro has plunged during the trading session here on Friday as the market is trying to sort out whether or not this latest breakout is a real thing, or false. Tensions around the world could continue to play a part as well.
EUR/USD
The Euro has plunged during the trading session here on Friday as the market is looking to see the 1.1850 level as a potential support level as it was the top of a previous resistance barrier. All things being equal, this is a market that continues to see a lot of questions asked of the breakout. At this point, we are at an inflection point for this trend.
Now that we have pulled back a bit, I think you have to look at this through the prism of a potential buy on the dip scenario. If we turn around and bounce from here, then I think it opens up the potential for a big move to the upside, perhaps to the 1.23 level. That is the measured move of the consolidation.
Support and Resistance Levels
But if we break down below 1.18, then I don't know that I trust this breakout and we probably enter the realm of going sideways and doing nothing yet again, which is the typical behavior for this pair. Do not forget that.
So with that being said, I think this is a market that is wait and see, but if we can get some type of bounce, it might be ready to continue to the upside. The ECB is thought to be standing pat while the Federal Reserve is expected to cut a couple of times. That's part of what's going on here, but quite frankly, we're just on that precipice trying to figure out whether or not this is a false breakout or not.
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