The EUR/USD pair rose during the session on Monday, proving the 1.35 level to be a supportive as I had anticipated. Whether or not we can go far from here is probably a completely different question, especially considering that the jobs numbers out of America are due on Friday. The 1.35 level of course is a large, round, psychologically significant number, and as a result I believe that it certainly will continue to attract a certain amount of traders. The bounce wasn’t massive, but the fact that we didn’t fall you further tell us to me that this market probably isn’t going to in the near term. That makes sense, considering that a lot of traders are probably waiting to see what the employment situations like in the United States.
There’s also talk about the European Central Bank getting involved in the markets as well, as they will have to deal with deflationary issues. That hasn’t happened yet obviously, but that has to weigh on the value of the Euro as well. Personally, I see the market as being in a consolidation area between the 1.35 level on the bottom, and the 1.37 level on the top. With that, I think that the market will more than likely consolidate in a relatively tight range now, and to be honest I don’t even know if the employment numbers will be enough to break us out.
Far too many moving parts.
Trying to figure out the fundamentals for this pair is going to be a bit difficult. There simply far too many moving parts of the moment, and as a result I think that the market will try to find its own way via the technical analysis side. With that, I believe that this market will simply banging around in this 200 PIP range for the next couple of days, and truthfully I would be surprised to see anything beyond a 50 PIP move. After that, it would not surprise me at all if we still remained in the supportive consolidation area, as the EUR/USD pair tends to be choppy these days.
