By: DailyForex.com
The EUR/USD pair went back and forth during the session on Tuesday, looking just as lost as usual. However, the market did drift down towards the 1.2825 level, and found support as we would expect. Because of this, the market did bounce and form a hammer like candle at the end of the day.
.jpg "EUR/USD may 22")
Because of the shape of the hammer-ish type it candle, I suspect that this market is getting ready to rally again. I don't know if we can break above the 1.3000 level, this probably comes down to whatever the Federal Reserve Chairman says during congressional testimony later today, as if he suggests that the Federal Reserve is going to continue to expand its quantitative easing, I think of that point this pair will certainly breakout to the upside. Otherwise, I think we may get a little bit of a boost for this market, but sellers should start stepping and right around the 1.3000 handle.
Short-term trading
The first thing that I would have to say about this pair is that it is short-term trading only right now. The market has been far too choppy for several months now to really hang onto anything trade, because every move that has had a significant stretch to it has been based upon headlines more than anything else. Because of this, there hasn't been a nice trend to follow for more than a couple of weeks at a time.
I don't think that this market is showing is anything different, and as a result I fully expect the 1.3000 level to offer enough resistance to form a resistive candle. I also recognize the fact that there may be a short-term buying opportunity though. This is why my thought process on this market is that we will more than likely go higher, but only for short-term play. Once we get towards the 1.3000 level, I suspect that resistance will come back into play, creating a resistive candle that I will be more than willing to sell. Alternately, if we did fall from here and break down below the 1.28 handle, that would be very bearish sign.