Potential signal:
- I am a buyer or this pair if we get close to the 0.93 level, with a stop loss at the 0.9250 level.
- I would also be a buyer above the 0.95 level, with a stop loss at 0.94 below.
- The target would be the 0.9650 region.
The Euro has rallied a little bit during the early hours on Tuesday as we continue to see the Euro try to build a bit of a base against the Swiss franc. Underneath I see the 0.93 level as a floor in the market as it is an area that has been important multiple times. All things being equal, the 0.93 level underneath is a floor while the 0.95 level above is a bit of a barrier.
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As we consolidate, it's worth noting that we are going back and forth with a kind of chopping action as we are trying to sort out whether or not this is actually the floor. Keep in mind, this pair is highly sensitive to the risk appetite.
Looking Forward
The Swiss franc is considered to be a major safety currency while the euro is a little bit more risk on. At this juncture, I think you continue to see a lot of back and forth range bound trading. So if you're a short-term trader, you might be able to buy on dips, assuming that we don't get a daily close below the 0.93 level. If the market were to reach the 0.95 level and close above there on a daily close, then at that point in time, I think you've got a shift in the overall attitude and the euro could take off to the upside.
I wouldn't get long at that point; except I would also look around the world and see what's going on. Do we have risk on and multiple other currency pairs and markets? Because if we do, then it all lines up and it ends up being a nice buying opportunity for a bigger move. That being said right now, this is a market to me at least that looks very neutral. So, I will continue to trade it back and forth with a small position. It's just a little bit to pad my returns. It's not necessarily how I make most of my gains.
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