By: DailyForex.com
The EUR/USD pair rose during the session on Monday again, as the selling of the US dollar continues. The highs of the day did pullback a little bit, but it does look relatively strong at this point in time. Adding to the significance of the gains on Monday is the fact that we bounced off of the trend line, which of course signals that the market may want to go higher.
Looking forward, we have the nonfarm payroll announcement coming out on Friday this week, so we could have a bit of choppiness over the next couple of sessions. I still see the 1.2750 area just below the trend line as fairly significant support as well, and as such I don't expect this pair to fall anytime soon. As long as the Federal Reserve continues to print money as fast is a can, this pair should continue to rise until we get the next European crisis.
Having said that, I do expect that we will eventually see a wicked pullback in this currency pair, and I don't think that we will get above the 1.35 level this year. Just above where we are right now, I see the 1.30 level as resistance and several handles above as well.
Tight Ranges Over the Next Couple of Sessions
Because of that aforementioned nonfarm payroll number, I don't expect too many traders to be willing to throw a taunt of risk into the market. Because of this, this pair will continue to be a bit difficult to trade, but I still feel that the upward bias is certainly in the market.
In fact, it wouldn't surprise me to see this pair selloff in a knee-jerk reaction on Friday, only to turn around and reverse that move by the end of the day. I think that although there are serious problems looming in Europe, the market is choosing to "whistling past the graveyard" in the meantime as it focuses on the Federal Reserve and its quantitative easing program. The Euro should continue to benefit from not only this, but bond yields starting to slip a little bit in the periphery on the continent.