The EUR/USD pair initially fell during the session on Friday, but the 1.37 level offered enough support to turn things back around and cause a significant bounce. This bounce of course formed a hammer, which is also right at a cluster that we had seen during the month of February. That cluster in offers enough of a supportive bounce in order to make this market more than likely head back to the 1.3850 level in my opinion.
That would simply be causing a bit of consolidation in this vicinity, which would be a big surprise considering how choppy this pair has been. A lot of traders out there have simply walked away from the EUR/USD pair over the last several months, as it has been a bit difficult to deal with at times. Small spread or not, and erratic market is one that is very difficult to be involved in.
Central bank headlines.
This pair typically will trend for very long periods of time, but at this point in time I see no change to the back and forth motion. This is a pair that tends to be favored by most short-term traders, which makes sense at this moment in time considering that most moves have been rather small. It really is assisting is an overall trend at the moment, so it’s very difficult to be involved in for anything more than a short “smash and grab” type of trade.
I believe that a break of the top the hammer since this market looking for the 1.350 level, but that area will more than likely cause a bit of resistance. Above there, I see the 1.3950 level as the next target. It is not until we get above the 1.40 level that I feel we can buy and hold this market, as there is a major downtrend line off of the monthly chart in that vicinity. As far selling is concerned, a break of the bottom of the hammer, which is extensively the 1.37 level, I believe sends this market down to the 1.35 handle.
