The EUR/USD pair went sideways initially during the day on Wednesday, but rolled over to fall down towards the 1.14 level. That’s an area that it obviously could cause some support due to the fact that it is a large, round, psychologically significant number, and of course the fact that at any moment Janet Yellen could say something in front of Congress that would change the trajectory of this market. Will we have essentially seen is that there was preparation of the EUR/USD pair breaking out to the upside longer-term, as the 1.15 level was so massively resistive. Now that Janet Yellen has not necessarily suggested that the Federal Reserve can raise rates, it put a different attitude in this market. It should be said that the 1.15 level above has been longer-term resistance over the last 3 years, and I think that the weekly close is going to be vital. This is because if consolidation continues, we could fall to the 1.05 level over the next several months.
I think the only thing you can count on is volatility, but if this pair rolls over significantly, we could see the beginning of a serious moved to the downside. Ironically, the US dollar isn’t grinding higher against most currencies, it just seems to be against this one. If we did turn around and break above the 1.15 level, I think that point the buyers would probably jump in with 2 feet. Until then, I suspect that longer-term traders are still looking for an opportunity to short, but in the meantime, it’s difficult to hang onto a trade for any real length of time. Ultimately, I think you will have to look to the longer-term charts to make any type of trading decisions.
Written by FX Empire