The EUR/USD pair fell initially during the day on Thursday, as we reached down to the 1.11 level underneath. That is an area that has previously been resistive, and now it should be supportive. We also have the 24-hour moving average just below offering support, but it does look like we need to consolidate in this area to pick up enough momentum to continue going higher. If we were to break down below the 1.1080 level, the market should then go down to the 1.10 level under that. Ultimately, the EUR/USD pair is reacting to the French election and the stability and the European Union as far as politics is concerned, so it makes sense that we would continue to see bullish pressure. It is also reacting to the political drama and the United States which seems to be never-ending.
On a bounce, or a break above the 1.1150 level, the market should continue to go higher, perhaps reaching towards the 1.12 handle. Ultimately, I believe that a “buy on the dips” type of mentality probably remains in this market, and it’s not until we break below the 1.10 level that I would be concerned about the recent uptrend. Volatility will almost certainly be a fact of life in this pair, because so many high-frequency traders choose the EUR/USD to ply their wares. Ultimately, the markets will make a lot of noise, but it appears that we are going to continue to rally from here, albeit in a choppy manner as the “easy money” has been made already and it now looks as if the market continues to see bullish pressure, but the impulsive move has been made a couple of days ago. Value should present itself, but caution will be needed going forward.
Written by FX Empire