The EUR/USD pair continued to bounce around in the relatively tight range that we have seen for several months during the month of February. What I find interesting about the monthly chart attached to this article is that we are coming up upon the 1.38 resistance level yet again, and we have a fairly significant downtrend line that forms the top of a massive potential channel. With that being said, I think that this market might be negative for the Euro, but the real question is whether or not we can break down below the 1.35 level. I don’t know that’s going to be the case, I’m fray that we are going to see another four weeks of choppiness in this marketplace, which of course has made this currency pair almost impossible to trade.
That being said, there is the possibility that we break out to the upside. If we do, this pair could go much higher. We could be looking at 1.50 eventually, but obviously way down the road. If we get a breakout, I would suspect the 1.40 level would be targeted almost immediately, and above there 1.45 or so.
Long-term traders have struggled.
If you follow my articles here, you know that several of my friends have basically given up on this pair over the last several months. The longer-term traders have really had an issue trading this pair as it simply wants to go back and forth. Even in this latest “uptrend”, there have been massive pullbacks that have basically made this market choppy under the best of circumstances. Because of this, I know that a lot of traders are basically step away from it, and are using it for what I’ve been using it for: a relative strength indicator for the Euro.
That being said, a potential breakout of course catches my attention. We will have to see what happens, but the more I look at this chart, the more I realize of the 1.38 level could be very important for the longer-term strength or weakness of the Euro.
