The EUR/USD pair rose initially during the day on Monday, but failed to hang onto any semblance of positivity. By doing so, it ended up forming a bit of a shooting star. The thing that I gather the most out of this is that the 1.14 level is offering a little bit of resistance. That’s not particularly surprising, and the fact that we had no economic announcements come out during the session of significance also suggests that little movement should have happened. In this scenario, it’s very easy to be lulled to sleep.
With that being said, I think that the 1.13 level below will probably cause a bit of support. After all, it was significant resistance previously, so it would of course makes sense that market memory dictates that buyers will be attracted to this particular region. That being said though, I think that we may have a couple of quiet sessions ahead of us.
Little in the way of announcements
Yes, the ZEW announcement comes out during the day today, but quite frankly I don’t see how that moves the market significantly. At this point in time, it looks like the currency markets are simply content to sit still. In general, there isn’t much in the way of trading at the moment, and with that it’s probably best to wait for some type of impulsive move before risking your own money.
I believe that if we can break above the 1.14 level, we will then reach towards the all-important 1.15 level. That is the top of the ascending triangle that I see on this chart when it comes to the longer-term movement, and with that I believe that we would have a bit of a trend change. As you can see on my chart, I have an uptrend line just below that is massively supportive. It is not until we break down below there that I would even remotely consider selling with any real length of time involved. Quite frankly, this is probably a great pair to buy on short-term pullbacks, but you have to keep in mind that your target will probably be 20 or 30 pips half of the time.
