The EUR/USD pair initially went sideways, but then broke down significantly to test the 1.13 region. I believe that the market will probably turn around to reach towards the upside, perhaps going back towards the 1.14 level. I believe that this pair is going to be very volatile after the FOMC Meeting Minutes, which can cause quite a bit of influence as to where the US dollar goes next. If we break down below the 1.13 level, that will be a very negative sign, and could send this market looking towards the 1.12 level underneath. The market has recently shown quite a bit of resiliency, and the fact that we pull back the way we have suggests that people are looking to pick up value when it appears.
Waiting for the break out
If we break above the 1.15 level, the market should continue to go towards the 1.18 level above. The 1.15 level has been the top of a three-year consolidation area, and therefore breaking above there would be a massive bullish sign for a market that has been impulsive to the upside as of late. Alternately, if we break down below the 1.12 level, I then become bearish as that would be a very negative sign. The market will look likely to react to the central bank moves in both Europe and the United States. The markets will continue to be choppy and volatile as they have been for the longer-term, but hopefully the Federal Reserve will give us the clarity that we need to trade the US dollar in general.
Written by FX Empire