The EUR/USD pair went sideways most of the session on Monday, but once the Americans took control of the marketplace, we fell significantly, testing the 1.1150 level underneath. There is a certain amount of noise just below, and that should cause support, at least for short-term traders. However, we breakdown below, the 1.11 level underneath is supportive. A breakdown below that region, the market then is free to go down to the 1.10 level afterwards. Alternately, we could bounce from this area, and then go looking for the 1.12 level next.
Remember, this pair is going to be volatile for several different reasons, not the least of which is the negotiations of the British to leave the European Union. As things work against the EUR, this pair will of course fall, even if it has nothing to do with the US dollar. Alternately, we have concerns about whether or not the Federal Reserve will continue to raise interest rates, and quite frankly it looks as if they will. So, with all of the various bits and pieces move in this market around, it looks as if we will continue to be very choppy, and I think at the end of the day it’s going to focus on short-term trading only, and probably in both directions. I believe that the choppiness continues to be an issue in this pair, so therefore I’m not necessarily interested in trading anytime soon. However, I recognize that these various levels will have an effect on the market, so if you are hell-bent on trading this pair, those of the levels you need to pay attention to.
Written by FX Empire