The EUR/USD pair rose slightly during the Thursday session as the market looks ready to reenter the consolidation area between 1.28 and 1.3150 over the next couple of weeks. The 200 day simple moving averages just below the current price action, and as such it does look like we are ready to continue the bounce.
However, we do see risks via the headlines coming out, and of course the 1.30 handle which will be minor resistance. We figure that the market will start to focus on the so-called “fiscal cliff” in America, and this could put a little bit of weight on the US dollar for the short-term. However, if the United States does in fact go over that Cliff, we could see a real run to the Dollar as traders buy US Treasuries. With this being said, we do not expect to break through the 1.3150 level, and would be willing to sell resistive action going forward. However, having said that we feel that this market will go higher over the next couple of sessions.
Written by FX Empire