The EUR/USD pair looks primed to continue the sideways action that we have seen for some time. Although the pair did in fact break down below the 1.30 level, the support that the market currently seems to be adhering to extends as low as 1.2950 or so. Because of this, the fact that the Friday session closed above that area, it is hard to get overly bearish on this pair at the moment.
In the end, the pair will more than likely attract bargain hunters this week, but to expect some kind of surge is probably being a bit too optimistic at this point. The US dollar continues to be the favored currency in the Forex markets, but if there is a currency out there that has nine lives – it’s the Euro.
Looking at the chart, the breakdown will have caught some people off guard, but you can clearly see that there is a lot of “noise” down to the 1.28 handle. With this in mind, it is going to be easier for the pair to rise than fall overall. However, one always has to keep an eye on the headlines, as it seems like every time the markets calm down and we forget the debt issues in Europe, something comes back to get the market going. If there is a surprise – it will be negative.