The EUR/USD pair went back and forth during the session on Tuesday, essentially doing nothing but testing the bounds of the recent consolidation area. Because of this, this is a micromanaged pair at best, and scalpers will do quite well while the rest of the simply wait on the sidelines.
Looking at this chart, it's easy to see that the 1.33 level is offering support right now, in the 1.34 level is offering resistance. As far as the next move, it will be predicated upon breaking above or below these levels in order to show some type of momentum. Currently, we simply do not have it and this market looks like it's trying to make up its mind.
I have been saying for quite some time that the area between 1.33 and 1.35 would be one big nasty sick resistance area, and so far it seems to be the case. I think if we can get above 1.35, we could see a massive move higher. In fact, based upon the longer-term chart I see a potential inverted head and shoulders at that point in time being broken. If that happens, I believe that this market will eventually look for the 1.50 handle.
However, in the meantime we have a pair that simply doesn't want to go anywhere. On one hand, you have the European Central Bank that denies needing to do anything as far as monetary policy. On the other hand, you have the Federal Reserve that's looking like it wants to do any and everything you can to devalue the US dollar. In this particular set of circumstances, the Federal Reserve tends to get more respect simply because it has a larger printer when it comes to printing dollars!
Support
Even if we break down, I do believe that there is a time of support below. In fact, I think the 1.33 level is followed by the 1.3250 level, the 1.3150 level, and then eventually the 1.30 level as well. Because of this, I actually prefer to go along in this marketplace, even though I don't necessarily like the Euro itself. But remember, currency trading is about relative value, not what something should be worth on its own. It is because of this that I believe this pair can go higher.
