The EUR/USD pair fell initially during the session on Tuesday, but as you can see found enough support just above the 1.35 handle in order to bounce and form a hammer. The hammer of course suggests that there is quite a bit of support, and as a result I think this market will probably bounce. In fact, I see this market bouncing all the way to the 1.3650 level without too many issues. I would be buying this pair on a break of the top the hammer, but let’s keep one thing straight - this trade would certainly be a short-term one.
Below the current trading area, I see the 1.35 level as being very supportive, and as a result a break below there has me getting very bearish of this market. On the other hand, I would fully expect to see bearish action right around the 1.37 handle as well, and wouldn’t be too concerned about shorting in that area also.
More of the same in my opinion.
I think this market is going to continue to be choppy with a slightly negative bias. Even if we break above the 1.37 handle, I have a hard time believing that we are going to break above the 1.38 level anytime soon. I think this market will continue to be choppy in the foreseeable future, and that this market will continue to frustrate traders. This is a short-term traders market at the moment, and has been for quite some time quite frankly. That, I believe that day traders have taken over, and therefore I am working with shorter time frames these days.
If we did break above the 1.38 handle however, there’s probably quite a bit of resistance all the way to the 1.4 handle. Because of that, I think that the next several months are going to be very difficult trading this pair, but then again that’s not exactly something new is it? All things being equal, I think we keep a slightly negative tone, with the occasional pickup in price favor of the Euro.
