The EUR/USD pair did very little during the day on Monday, as we continue to grind just below the 1.12 level, an area that of course has a certain amount of psychological importance, but currently seems to be a market that we are hovering around overall. The resistance seems to be closer to the 1.1250 level now, and with this I think that the market continues to be a “buy on the dips” type of situation overall, so I think that eventually we will break out to the upside and reach towards the 1.15 handle. That is the top of the recent consolidation area, as the last couple of years we have been bouncing off the 1.05 level on the bottom, and pulling back from the 1.15 handle. I think that’s what we’re trying to do, simply reach to the top of that consolidation area, but I am not anticipating a major break out.
However, if we were to do that…
If we were to breakout above the 1.15 handle over the next several weeks, that would be an extraordinarily bullish sign in the pair would go much higher. I believe that there is a bullish proclivity to this market, but breaking above the 1.15 level is an entirely different argument altogether. I believe that we will continue to be very choppy and sideways in general for the short-term, but eventually something will happen that drive this market to the upside. I believe that the 1.1150 level underneath should be supportive, and that is an area that the markets have been paying attention to for some time. The market continues to be one that high-frequency traders are attracted to, so therefore it’s difficult to get large moves. This may be part of the consolidation that we have seen.
Written by FX Empire