The EUR/USD pair had a little bit of volatility during the day on Monday, with a slightly upward bias. However, this is a market that has sold off rather drastically after the jobs figure, and I expect that to possibly be the way we go forward as the 1.17 level below will be calling. Quite frankly, this market is overbought, so bit of a pullback would be expected. I think that the “floor” in the uptrend is closer to the 1.15 level below, so if we were to somehow breakdown below there, that would change everything. Until then, I should assume that any pullback underneath is going to be a short-term opportunity at best. I would think that there should be some type of support at the large, round, psychologically important numbers below, but until we get some type of bounce or confirmation, it’s going to be very difficult to start buying.
I think regardless, were going to get a lot of volatility is although the European economy seems to be doing much better, it was a bit of surprise of the jobs number was stronger than anticipated. Because of this, the Federal Reserve is almost guaranteed to raise interest rates at least once this year, if not twice. While the ECB looks to be tightening its monetary policy, there is no clear path to when they do so, so part of this may be a bit speculative at best.
Written by FX Empire