The EUR/USD pair fell initially during the session on Monday, but as you can see found the 1.35 level supportive enough to cause the market to bounce back and clear the 1.3550 handle. The fact that we did that is significant in my opinion simply because I saw the whole area as one big “support zone.” With that, I think the support zone has held, and it’s more than likely that this pair will go higher from here.
I would need to see a break above the highs of the session though in order to start buying. If we do get above there, I believe that the 1.3650 level will be targeted first, and then possibly the 1.38 handle if we have enough buying pressure. With that, it would simply be another case of the Euro having plenty of buyers out there, no matter what the situation.
Continued choppiness
It really doesn’t matter which direction we head, I see nothing but choppiness coming for this pair. If we go higher, I believe that the 1.36 level will cause a bit of a stutter on the way up to the 1.3650 level. We get above there, we certainly will have quite a bit of resistance at the 1.37 handle, but ultimately should get to the 1.38 handle, although probably after a pullback. It’s just the way that I see the charts right now, as we continue to chop.
If we break down below the 1.35 handle, we could see choppiness all the way down to the 1.33 level. 1.34 could be supportive, as well as 1.3450. This pair has been choppy for several years now in general, so quite frankly this would be the “norm” in this market. I’m hearing more and more noise about high-frequency traders entering this market, and as a result this would not surprise me at all. After all, as traders tend to kill off markets rather quickly. This being the most liquid market would be the most obvious choice for them, so we will have to wait and see. Nonetheless, I believe in the short-term we should see some bullishness.
