The EUR/USD pair initially fell during the day on Monday, dropping all the way down to the 1.11 level early, but then bounced significantly and reached towards the 1.12 level above. That area offered a bit of resistance, and I think there is a lot of noise just above there as well. Longer-term, I continue to believe that the market will try to reach towards the 1.15 level above, which is the top of the longer-term consolidation area that the market has been stuck in for 3 years. Given enough time, I believe that the market will try to reach that level but it will obviously be very noisy between now and then. Alternately, if we make a fresh, new low, the market should continue to go towards the 1.10 level, and then possibly even the 1.08 level underneath there. Currently though, looks as if the buyers are probably more likely to be the victorious in this market.
Overall, but buying dips has worked well over the last several weeks, and I believe that should continue to be the case. I think given enough time the buyers will continue to be attracted to this market as we have seen such a strong push to the upside, but I also recognize that it won’t necessarily be the easiest thing to hang onto as there is a lot of noise. If we were to break above the 1.15 level, that would be a very significant and bullish move, but I don’t think will be able to do that anytime soon, so I suspect that we will continue the longer-term consolidation of that we have seen for so long. There is nothing in the market to suggest that we are ready to get out of that range.
Written by FX Empire