The EURUSD pair shot like a rocket into the stratosphere after less than impressive US numbers came out during the early New York trading.

However, the 1.13 level is offering a bit of resistance as I record this, and I recognize that we will need more guidance from the Federal Reserve to continue. Longer-term, I still think that we are going to go looking for the 1.15 level above, which has been the longer-term consolidation ceiling in this market for the last almost 3 years.

Because of this, I like buying pullbacks, unless of course the Federal Reserve explicitly says that there are more interest rate hikes coming later this year. That would be highly unusual, so I think the market continues to doubt the ability of the Federal Reserve to be hawkish, and with that, I believe that more and more bullish pressure will enter this market.

Looking for value

Think of pullbacks as value in this market and essentially the euro “going on sale.” I don’t know if we can break above the 1.15 handle, because quite frankly the European Union has its own set of issues, but I would not be interested in selling this pair until we broke significantly below the 1.12 level, and even then, I think it would be a short-term trade.

This of course could be changed by something that the Federal Reserve does, and at this point it doesn’t look likely to throw more volatility and a market that quite frankly doesn’t need any more. Buying dips and adding to my position is how I’ve been trading this market for some time, and it seems to be working out quite nicely. That should continue to be the attitude of this market going forward as there has been such a momentum shift.

Editor’s Note: Equity investors/traders can use the Currency Shares Euro Trust (FXE, quote) ETF to take positions in the euro without a FOREX account.  The ETF looks to track the price of the euro (EURUSD), minus ETF fee. The fund seeks to reflect the price of the euro with the shares representing a cost-effective investment relative to investing in the FOREX market.

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