The EUR/USD pair had a positive session for Monday, as a bit of “risk on” came back into the markets. The Non-Farm Payroll number out of the United States will have helped with risk appetite in general, and this generally – but not as much lately – means that the Dollar loses a bit of its luster.
The pair was of course reacting to the 1.30 level as well, an area that I think is going to be very difficult for the sellers to overcome in the near-term. I think they probably will eventually, but it will take some kind of catalyst in order to do so. The 200 day exponential moving average is also just above the range for the day, so this will have kept some trend traders selling at the top of the session range.
This pair will continue to be plagued by problems in Italy, and the results of that election issue. After all, it looks like there is another election in the cards, and as a result there is a bit of uncertainty in this market going forward. However, I see a ton of noise below, and going all the way down to the 1.28 level. This will keep the market moves lower a little bit in check, making this pair a real pain over the next couple of weeks in my estimation.
Range bound
The pair should remain somewhat range bound in the near term, and the range will more than likely be from 1.28 – 1.31 or so. In order to get bullish longer-term, I would have to see the 1.3250 level overtaken, and on a daily close. The selling of this pair for the longer-term won’t be easy for me until we are under the 1.28 level, as this would be a serious breech of support.
I have seen the Euro save itself more than once over the last few years, and I think we could see this again. How? I have no idea, but it seems that it is simply the way this pair moves. After all, the Federal Reserve is still printing Greenbacks as fast as they can. Because of all of the moving parts in this market, I suspect we will continue to see choppy trading.