The EUR/USD pair rolled over during the day on Monday, breaking towards the 1.1350 level as I record this. The market looks as if it is starting to show bearish pressure in a bit of significance, and I think that the 1.13 level will probably be targeted over the short term. What I find very interesting is that the 1.15 level above has scared a lot of traders away from this market. After all, that is the top of the consolidation that we have been in for the last 3 years, and that should of course keep traders a bit leery of hanging on to this market to the upside once we get to that area. I think that the market will continue to be very choppy overall, as traders will continue to look at interest rate differentials going forward.
Support at 1.13?
I think the question is now whether we will get support at the 1.13 level underneath. If we break down below there, the market should then go to the 1.12 handle. I believe that the weekly candle is going to be very interesting, because quite frankly it could give us the direction of this pair for the next several months. I do find it very interesting that the 1.15 level has scared traders away, because quite frankly at the end of the week last week, it looks like the buyers were going to make a serious attempt at the 1.15 level, of which a break above would be massively bullish. I believe we are going to continue to see a lot of back-and-forth choppy training, but we could end up looking at short-term trading at best, with perhaps a negative bias. Be very careful, and be quick to move stop losses to breakeven no matter what direction you are trading.
Written by FX Empire