The EUR/USD pair shot higher on Friday, slamming into the 1.12 region. This is an area that begins a lot of noise though, so I’m not real sure that we can break out above year. The weekly chart shows a very confused looking market, so I believe it’s probably best to leave the EUR/USD pair alone for the moment. However, I recognize that if we can break above the 1.1225 level, the markets probably going to go looking for the 1.13 level after that. A pullback from here could have the market looking for the 1.11 handle, and then the 1.10 level. This will come down to volatile conditions, so quite frankly I think if you want to trade the Euro, you may be better off trading against other currencies. After the Federal Reserve seemed more hawkish than originally anticipated, I think it, a lot of traders off guard. Now they are starting to look at the potential of growth out of the European Union, and although I’m not overly impressed, it seems as if the European Union is growing stronger than people had originally thought.
During the Friday session we had a horrible housing starts number coming out of the United States, and that works against the US dollar. This could have been part of the reason that the pair shot higher, but at the end of the week we are basically where he started so I don’t but too much credence into what’s going on currently as the market needs to comes to some type of consensus that we can follow. In the meantime, I would suggest no matter what you do you need to start trading with smaller positions in the EUR/USD pair as the volatility has gotten extraordinarily high.
Written by FX Empire