The US dollar fell significantly during the trading session on Tuesday, reaching towards the 112 level. This is an area that has been important more than once, and therefore it’s not a huge surprise to see that the buyers would return to this area to make a stand. I think if we bounce from here, it’s likely that we will probably reach towards the 113 handle, and that is an area that has also been important. I suspect that in the next couple of sessions, we will bounce between these 2 levels, so it could represent a short-term buying opportunity, but I would not expect much more than a scalp between now than the Nonfarm Payroll Numbers announcement.
That announcement does typically move this market rather drastically, so be aware of this. I think that the market will probably continue to offer opportunities for those who are quick enough and nimble enough to take advantage of this range, but I also recognize that if we were to break down below the 112 handle, we could drop to the 111 level which has also been supportive in the past. I would not be aggressive to the short side, because this pair does tend to have a certain amount of risk appetite connectivity, and the stock markets around the world look like the buyers are willing to get involved. As stock markets rise, buyers tend to flock to this pair.
Written by FX Empire