The EUR/USD pair fell during the session on Monday, but as you can see ran into a bit of support at the 1.35 level. That being the case, it's obvious that this market still looks very bullish, and the 1.35 region should offer a bit of support. However, I feel that the real support is down at the 1.34 handle, as you can see that was an area that we had broken out of relatively recently. The massive green candle of course is what push this through, and now that we have seen a shooting star recently, I believe that we will see a bit of a pullback.
With that being said, I will be looking for some type of supportive candle in order to start buying. Summer right around the 1.34 handle would be perfect, but I am willing to go as low as 1.33 as we had a bit of a gap there a couple of weeks ago. That gap of course should offer a bit of support, as they normally do and as long as the Federal Reserve is going to hold off on tapering, I believe that the US dollar in general will be on the back foot against the Euro.
Euro exits recession
Don't forget that the Europeans have recently exited a recession. This of course is very strong for the currency, and I believe that this market will continue to go much higher. That being the case though, it is interesting to think that the Dollar has done relatively well over the last couple of days as traders begin to worry about whether or not there's any economic growth out there. Nonetheless, I feel that the Euro is somewhat insulated against that as Europe is starting to show signs of life again.
This is going to be an interesting situation as the Dollars on the back foot against the Euro, but I still believe that the commodity currencies will suffer against the greenback. That being the case, look to economic announcements out of Europe to be the main drivers of this pair, not necessarily things going on in America.
