By: Christopher Lewis
EUR/USD continues to be an interesting place in which to do business. It seems that every time the market gets a bit of good news, something ugly comes back out of the closet and has traders running like frightened children. To be honest, it is hard to figure out who has it more wrong, the bulls or the bears. While I must admit that I have a belief that the Euro is doomed in the long run, I also have to admit that this market will move from day to day, and this market is one to be traded as such.
The Europeans announced that they couldn’t come up with an announcement on a second Greek bailout as the Greeks didn’t bother to do everything needed. (Big surprise.) This keeps happening, and one has to wonder how much longer the market is willing to give the EU, but it truly is remarkable how patient it really has been.
The pair is one that will continue to be driven by headlines and is going to be choppy in general it seems. Although there is always potential for some kind of drastic move, one would have to think that the odds are with a sudden meltdown. The fact is that the problems in Europe are far too complex for a sudden announcement to fix everything. However, a sudden piece of bad news can certainly move the markets in a much more dramatic manner I believe.
1.30 And Supportive Levels
The 1.30 level is an area that has seen support lately. The fall from the Wednesday session has us on a collision course with the area, and the support can actually be found all the way down to the 1.29 handle. It is an area that will decide the next several hundred pip in my opinion, and a daily close below it could have this market falling down to the 1.2650 lows in fairly short order.
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The 1.3250 level looks to have put a cap on the bulls in this market, so I feel we are going to see one of two scenarios: either a consolidation between 1.30 and 1.3250, or a daily close below the 1.29 level which has this pair falling. In the long run, there is recession in Europe, and many complex issues. I feel that the fall is only a matter of time – but we don’t know if it is now. Because of this, I have to acknowledge that the consolidation idea is a viable one. I will be watching this area, and acting accordingly.