The EUR/USD pair went sideways during the day initially on Tuesday, but broke down towards the 1.11 handle underneath. Having said that, it looks as if we are trying to bounce from here, and a short-term buying opportunity may be presenting itself. Given enough time, I think that a breakdown below the 1.11 level could happen, and that should send this market down to the 1.10 level after that. That is an area that is massively supportive, and a breakdown below there could have the market participants trying to fill the gap underneath that happened several weeks back. Nonetheless, I believe that the short-term trading looks likely to produce buying opportunities. With this in mind, I think that today could be a positive day, but I would be surprised to see the market break above the 1.1160 level.
Continued consolidation
Longer-term, this market has been consolidating between the 1.05 low on the bottom in the 1.15 level on the top. I think the market continues to consolidate between those two levels longer-term, and with that in mind it’s difficult to imagine a longer-term “buy-and-hold” or a “sell and forget” type of situation. The volatility will continue to pick up, but there should be plenty of opportunity for both bullish and bearish traders over the next several sessions. Comments coming out of the European Union will have an effect on this market as we see the divorce proceedings from the United Kingdom continue, but we also have the Federal Reserve looking to raise interest rates, so this shows just how erratic this pair will more than likely be over the next several months.
Written by FX Empire