The EUR USD pair rose during the session on Friday, but as you can see stalled at the 1.37 handle. This doesn’t surprise me too much, this is been a resistive barrier for the last two months, but I look at it as the beginning of a “thick zone”, as I see resistance all the way to the 1.38 handle. In fact, the 1.38 handle starts even more resistance above, so I don’t know how much farther this pair will go to the upside, at least in the short-term.
With that being said, I think that the pair will more than likely pullback over the next couple of sessions but I don’t necessarily have the setup quite yet. A resistant candle just above would be perfect, but again, I would suggest that this is a short-term move as the market remains somewhat range bound. After all, the 1.37 level has a strong counterpart in the 1.35 level, as it has held the market up for some time as well.
Choppy conditions should continue.
Choppy conditions should continue in this pair, simply because I don’t see any major catalyst to break us out. The biggest problem is that even if we break above the 1.37 level, as I suggested earlier this pair is going to struggle for the next couple hundred pips. I just don’t see any straight shot in one direction or the other. On the downside, things don’t get much better as the 1.35 level is supportive, but I see a lot of noise all the way down to the 1.33 handle. Quite frankly, this is a pair that is for day traders mainly at the moment. And in that environment, I suggest that perhaps a pullback is more likely just simply because it’s the easiest route.
As I have been stating recently, this pair is more or less a tertiary indicator for me at the moment, as I use it to gauge Euro strength in general, and trade the Euro against other currencies such as the Canadian dollar or the Japanese yen. Beyond that, I don’t really see much room to move.
