The EUR/USD pair was relatively volatile during the day on Wednesday, as we initially shot higher, pulled back to the daily open, and then rallied from there. We are well above the 1.11 level, and that of course is a bullish sign. However, I do know that there is a lot of noise between here and the 1.12 handle, so it’s very likely that trading conditions will continue to be very choppy. As far as breaking above the 1.12 level is concerned, I think we will probably have to attempt doing that several times. After all, it is a longer-term resistance barrier, so it’s going to take some work to get above. That doesn’t mean that we can’t do it, just that I don’t think we’re going to build a do it at the first move towards that level.
Political theater in America
The political theater in the United States continues to influence this pair, as traders have reacted to the potential investigation of a conversation between the President of the United States and Russian officials. Nonetheless, there isn’t anything concrete yet, so although the markets are a bit skittish due to these headlines, the reality is it could just be a blip on the radar. That has worked against the value of the US dollar and in favor of the Euro, but I believe that it is only strengthening the move that’s based upon political stability returning to the EU. This simply adds “fuel to the fire.”
In the short term, I will be buying on dips, but recognize that perhaps we may get a longer-term cell signal near the 1.12 level as it has been important on the longer-term charts. If we can break above there, then we obviously have a very bullish situation on our hands.
Written by FX Empire